Holidays

Best Practices for Running a Successful Restaurant Gift Program

November 2, 2021

Drive holiday revenue beyond the gift card with a diversified holiday gift program.

The season of gift-giving is here, and restaurants are in the enviable position of being able to provide an array of gift options to holiday shoppers.

It’s well known that gift card demand skyrockets during the holidays — with restaurants seeing nearly half of their annual gift card sales in November and December alone. But restaurants shouldn’t be focusing solely on how to sell gift cards this season. Instead, they have the opportunity to offer a holistic holiday gift program.

According to Eventbrite, 63% of adults prefer experiences as gifts over material objects. For restaurants, this means that in addition to gift cards, events, cooking classes and specialty tastings held at the restaurant (or virtually) would be an exciting present for most consumers. And for those who still love to unwrap something on Christmas morning, there’s plenty of opportunities to appeal to them with branded restaurant merchandise or signature gifts from the head chef or owner. There’s also an option to sell restaurant-specific ingredients — like sauces or spices — for diners to enjoy a taste of the restaurant right at home.

In short, selling gift cards should be the beginning, not the end, of a restaurant’s holiday gift program.

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The Benefits of a Holiday Gift Program

Since the United States’ wide vaccine rollout in mid-2021, consumers have enthusiastically been returning to restaurants and participating in more in-person activities, opening the door for restaurants to create more opportunities for gift giving this year.

This trend clearly suggests more demand for gift cards, which encourages diners to head out and try new restaurants. However, it’s important to remember the events and unique gift opportunities that only restaurants can provide.

For example, restaurants can leverage the fact that they employ a well-known chef by offering signed cookbooks or personalized cooking classes to be redeemed by the gift’s recipient. Other restaurants can offer food or beverage tastings as a gift, which can be held in the restaurant or virtually by packaging and sending out the supplies beforehand.

Plus, holiday season isn’t the only chance to sell gifts in a restaurant. Most businesses that sell gift cards and merchandise do so all year, but patrons might not know about that until the holidays. The proper positioning of a gift program during the holidays helps it succeed even more throughout the year. Customers learning about a restaurant’s gift options now opens up the possibility that they will think of that restaurant’s online or in-person store later in the year — perhaps for a pint glass for someone’s birthday or a gift card as a graduation gift.

To accomplish this, restaurants need to determine which gifts they’re equipped to offer, determine the best way to sell them, develop an effective and festive promotional plan and measure the success of their holiday gift program to shape their strategy for future years.

Popular Restaurant Gift Ideas for the Holidays

Sell Restaurant Gift Cards

Let’s start off with the moneymaker: Gift cards are indeed the most popular gift choice during the holidays, and restaurants often find themselves the preferred option for both shoppers and recipients. According to data from restaurants using BentoBox, restaurant gift card sales increase 326% in the month of December.

Still, gift card sales don’t always come naturally. With demand high, restaurants need to commit to figuring out how to sell as many gift cards as possible during the holidays. Not only do gift card sales offer the short-term benefit of immediate revenue, they also present long-term perks to businesses.

According to data from restaurants using BentoBox, 68% of guests will spend more than the initial value of their gift cards, and gift cards are a great way to turn those who have never been to a restaurant into new loyal customers. Conversely, 18% of gift cards are never redeemed, giving restaurants additional revenue without having to exchange it for food and beverage.

And despite demand, gift card sales can be competitive during the holidays, which is why many restaurants rely on the gift card promotion idea of offering “bonus bucks” with gift card purchases. For example, with the purchase of $50 or more in gift cards, the buyer might also receive an extra $10 coupon or a voucher for a free appetizer that must be redeemed by the end of the year.

Blaze Pizza runs a version of this promotion every year, offering a free pizza for a gift card purchase of $25. Buyers can share the extra love with the gift’s recipient (or maybe hold onto it for themselves for later).

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Distribute Restaurant Merchandise

Merchandise is an often overlooked gift idea for restaurants. While some restaurants see strong sales from wearable merchandise like t-shirts, hoodies and hats, other restaurants don’t aim to be apparel retailers. However, there are plenty of other merch options for those who feel that way.

First off, restaurants can sell on-theme kitchen goods. A brewery might sell branded pint glasses, a cafe might sell coffee mugs with the shop’s logo and a fine dining restaurant might sell signature steak knives.

Next, restaurants that use custom ingredients can package and sell them for those who want to use them in their own kitchen. Examples include Williamson Bros Bar-B-Q bottled sauces and Bubby’s famous pancake mix. Home cooks and those who aren’t in close proximity to the restaurant will be sure to enjoy a taste of the restaurant in a more convenient way.

Another option is for restaurants with well-known chefs and/or owners to use that recognition to benefit their gift program. For example, New York's, MP Grocery is helmed by inimitable chef and owner Misi Robbins. Fans of her restaurants — Misi, Lilia and her latest project, Misi Pasta — can buy a copy of her book right on MP Grocery’s website.

Finally, don’t overlook how beneficial apparel options can be for restaurants. T-shirt markups, for example, are commonly as high as 60% — meaning a shirt that’s sold for $25 earns the restaurant $15 in profit. Apparel also acts as free marketing for the restaurant whenever somebody wears it in public.

No matter which type of merchandise a restaurant offers, the business shouldn’t limit it to the restaurant’s storefront. Instead, there should be an option to purchase restaurant gifts online with a restaurant merchandise system. That way, buyers can purchase a gift at a time and in a way that’s most convenient — particularly if they’re buying it for someone who’s closer to the restaurant than they are.

Host Ticketed Events

The experience that ticketed events provide makes them an excellent gift idea for restaurants. Ticketed events like beer or wine tastings, cooking classes and holiday event parties can be tailored to fit the brand of the restaurant. While a nightclub might make their New Year’s Eve party an exciting and exclusive event, a fine-dining Italian restaurant might offer an intimate pasta-making class paired with a wine tasting with the restaurant’s head chef.

One example can be seen in Houston’s Pondicheri, which offers cooking classes like the virtual “Friendsgiving” event.

The website for Pondicheri promotes and sells event tickets

Ticketed events build on the aforementioned statistic about the majority of Americans preferring an experience to an object as a present. When they’re held in a restaurant, these events instill knowledge and forge memories for attendees and gift recipients — with the restaurant playing a key part in that experience.

Restaurants can use ticketed event management software to keep events organized and well-attended, as well as manage attendee and event logistics from the system’s backend. This is key for holding a seamless, successful holiday event.

Promoting a Restaurant Gift Program

A restaurant’s holiday gift program only works if customers and buyers are aware of it. A thorough plan for promotion will help spread the word and increase revenue. Here are a few ways to get the word out about a restaurant’s holiday gift program.

Focus on In-Store Promotion

The first place to begin promotion is in the restaurant itself, since this method markets directly to guests who are already in your building. Posters in the restaurant or tents on tables and the takeout counter can quickly explain the gifts the restaurant is selling. If the restaurant has an online store, this promotional material can provide a link — or even a QR code — to that store.

Additionally, the restaurant can gamify staff to see who can sell the most gift cards by offering an incentive or cash bonus for the server who does the most gift card promotion. These friendly competitions among staff also add a fun challenge to servers’ shifts and can directly result in more gift card sales for the restaurant, along with a strong employer brand that helps restaurants retain and recruit workers to their business.

Lean Into Social Media Promotion

Instagram and Facebook are a marketing playground for restaurants during the holiday season. Restaurants can design different posts, spend advertising dollars to reach a wider audience and use creative visuals as Saxbys does in this gift card promotional post (bonus points for the GIF usage!).

Social media is also an effective platform for promoting instant purchases. On average, 130 million Instagram users tap a shopping post each month — a number that’s likely much higher during the holidays. Promoting a restaurant’s gift options and linking to an online store on the restaurant’s profile sends interested buyers straight to a purchase option.

Update the Restaurant’s Website

A restaurant’s website is an ideal place to promote its gift program, as anyone who’s on that site is already actively seeking out information about the restaurant.

Restaurants like Virtue have a tab on the website’s navigation bar dedicated to an online merchandise store, allowing visitors to easily buy gift cards, shirts, tote bags and more gifts that promote the restaurant and brand.

A restaurant can also adjust its homepage so a popup notification explaining gift options and availability — and linking straight to the restaurant’s gift page — is the first thing a visitor sees during the holiday months.

Leverage Distribution Lists with Email Promotion

Finally, a restaurant should leverage its email database in any holiday gift marketing.

Guests who use a restaurant's online ordering software usually have to enter their email address to place an order, which can then be used to communicate with and remarket to these guests. Additionally, some customers simply sign up for a restaurant’s email list because they want to hear news about special offers and events — and holiday gift options are the perfect opportunity to communicate those offerings.

Whether it’s early signup to a ticketed event, a “buy-one, get-one” gift card promotion or even a friendly reminder that the restaurant simply has an online gift store, emailing customers images and descriptions of the restaurant’s holiday gift items is a no-brainer.

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Measuring Effectiveness

Like every aspect of a restaurant, a gift program should be evaluated for its strong suits and areas of improvement — especially for a high-opportunity time like the holiday season. That’s why restaurants should analyze key metrics to help them determine what went right and what should be tweaked for next year’s holiday season.

Calculate Gross Revenue from Gift Sales

Overall, the total revenue from a restaurant gift program is a good indicator of its health. Naturally, this number should be broken down and compared to benchmarks like the previous year’s sales, as well as projections that were made for this specific year. If a restaurant can accurately forecast how much of each type of gift it will sell, it can help determine the markup, inventory and sales projection numbers for the next holiday season.

Measure Ticketed Event Guest Satisfaction

Emailing event participants with a feedback survey gives restaurant event planners the insights they need to improve their events if needed. For example, guests might explain the best and worst parts of the event, whether or not it met their expectations and if they would attend a similar event if it were held again.

Determine Gift Card Redemptions

Two specific areas restaurants should look at regarding gift cards are redemption rates and redemption amounts.

A gift card’s redemption rate is the percentage of issued gift cards that got redeemed. Knowing this percentage helps restaurants plan for how much extra revenue they reasonably don’t have to set aside for future redemptions and can be spent on other areas of the restaurant.

A gift card’s redemption amount refers to how much the recipient underspent or overspent compared to the initial amount. As stated earlier, most recipients spend more than the initial amount. In that case, restaurants may find it beneficial to promote higher gift card purchases through the promise of additional gift card credit next holiday season. By doing so, they increase the amount of revenue from gift card sales and the amount being overspent.

Conclusion

As the holidays draw near, restaurants have the ability to capitalize not just on the annual surge in gift card demand, but also a growing interest in gifting events and experiences. Combined with merchandising opportunities, restaurants can head into the holidays with a robust gift program that will directly raise their bottom lines.

To make that happen, restaurants should equip themselves with the right tools for the job this season, like a restaurant website service that easily allows for building an online gift card program, merchandise store, ticketed events storefront and more.

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