With Valentine’s Day taking place this Friday, your restaurant is bound to experience a significant boost in visitation. Couples all over Canada will be looking for places to dine, this forthcoming weekend, in order to celebrate their romantic unions. Is your restaurant ready to accept them?
One way to ensure that you enjoy a sales boost, this week, is to put gift cards on the menu. In fact, highlighting the fact your restaurant offers gift cards should be a year-round activity. The selling of gift cards ensures that you reap the benefits of being a restaurateur all year long.
One reason to sell gift cards both in your restaurant and on your website is to take advantage of spillage. Not every person who receives a gift card uses it. And not every person who uses a gift card spends its entire worth in one sitting. That means that, in many cases, the money you earn by selling your gift card will not be redeemed in full. This is called “spillage”, which can also be defined as “earning money for nothing.”
“Spillage refers to the dollar amount on gift cards never actually used,” explains Rod Brant on ToastTab.com, “A few years ago, it wasn’t all that unusual to hear of spillage rates in excess of 30% in all restaurant types. While the number is not nearly as high these days due to consumer protection laws, think of all the gift cards you have in your own living room drawer or in your wallet somewhere. The fact is, not all gift cards are used. This means money for your business.”
Overspend is the exact opposite of spillage. As you may have guessed, this is where people spend more than the amounts of their gift cards. The beauty of overspend is the fact that once your gift card is sold, it almost always guarantees that you’ll be making even more money in the long run.
As Brant points out, “customers tend to look at gift cards as ‘free money’ and will likely spend much more than the value of the card when they visit. Guests at full service restaurants spend an average of 72% over the actual value of the card. So, a customer who comes in with a card worth $50 will spend $86 or more.”
By selling gift cards in your restaurant, you’ll be able to place one extra reason on the list of reasons why other businesses should partner with yours. Consider contacting companies outside of your industry in order to create combo packages with your gift cards. The value you add to gift card purchases in your eatery will help to boost overall sales. Olive Garden, for example, offers a dinner and movie combo pack.
“For $50, get a $25 Olive Garden Gift Card and a $25 Fandango Gift Card. Check out the theatres partnering with Fandango,” their website displays. In addition, Olive Garden offers both digital and physical gift card options.