Why do some restaurants offer the buyer additional gift cards when purchasing a holiday gift card? —Pat B., St. Louis
The short answers are "because they're smart" and "because they can." Between Thanksgiving and New Year’s Eve, restaurants often sell 75 percent of the calendar year’s gift cards. They're a no-lose deal for restaurants for several reasons:
1. Gift cards present an opportunity for a restaurant to pick up new customers, because recipients are often first-timers.
2. They represent a tremendous injection of pure revenue, plus the payback is very slow and spread out.
3. A sizeable percentage of gift cards are never redeemed (20 to 30 percent by some estimates), so the issuer can afford to be generous with deals and bounce-back offers.
4. Restaurants that offer cards redeemable at multiple places often introduce the recipient to a new concept or location.
5. Gift cards to ancillary providers, such as third-party delivery companies, such as Grubhub or Uber Eats, indirectly benefit the restaurants that they service through increased exposure.
At this time of year, restaurants should do all in their power to facilitate gift-card sales and make it easy for gift card-buyers to spend. Not doing so just passes that found income along to someone else. Savvy restaurateurs should have gift cards readily available at the front desk with a staffer who can facilitate the sale, offer the same “curbside pick-up” service for gift cards as for food orders, and make sure the restaurant phone gets answered at off-times (and off-days) so no sales are missed. (Forwarding the house phone to a cell pays big benefits during gift-giving season.)
Restaurants should give customers a deal they can’t refuse: Many offer a "buy one and get more" type of deal—as in spend $100, and get a card worth an additional $10, $15, or $20. Such restaurant groups/local chains as Sugarfire Smoke House, Niche Food Group, Hamilton Hospitality, and Drunken Fish (among many others) make such offers. At Katie’s Pizza & Pasta Osteria, a $50 gift card nets the buyer an additional $10 card plus a free pound of fresh pasta—and the offer's good through January 1.
Happy Holidays, indeed.
If you have a question for George, email him at gmahe@stlmag.com. You can also follow him on Twitter @stlmag_dining. For more from St. Louis Magazine, subscribe or follow us on Facebook, Twitter, and Instagram.
