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It’s Gift Card Season for Franchising


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'Tis the season for selling gift cards. And it could be a real benefit for the slow early months of 2020. 

According to Mo Chaar at the gift card, cloud POS and loyalty vendor Givex, this is the big game for the $124 billion gift card industry. 

“I would say anywhere from 85 to 90 percent of gift card sales happen from mid October to December 24, then the rest is around Mother’s and Father’s Day and back to school or graduations,” said Chaar. 

He said for concepts with a successful gift card strategy, it can make the quiet months of January and February perform a lot better. When brands start offering incentives or get campaigns going after the holiday season, gift-card holders are especially keen to get out and get an additional perks beyond the free money in their pocket. 

That generally has customers in the buying mood, and Chaar said there is a significant bump beyond the gift-card dollars. 

“Lift is what you’re talking about here. So if I come in with a $50 card I’ll probably end up spending $35. Usually, it’s 30 to 35 percent on top of the cards,” said Chaar. “So, if you wouldn’t have gotten that bottle of wine, you will now because of the free money.” 

A lot of care goes into building a quality gift card program, so alas, this year might not be the time to start. Chaar said they start talking to some brands as early as January or February to diagnose how the season went and lay out a plan for the next year. But there are plenty of small operators that wait for the budget to make sense and order cards. 

He said the big pain point in planning is just making sure the integrations to the point of sale are there. For many point of sale systems, he said Givex can get things going in about two weeks, but some integrations can take as much as six months. So plan ahead. 

For the actual act of getting the card in people’s hand, it’s all about hyper-local marketing. 

“A lot of it is going to be around awareness, in a restaurant you can do table tents when you walk in,” said Chaar. “We’ve seen people put in full racks at the front by the greeter, they’ll put a big gift card stand with a bunch of different gift cards so people can see, touch and feel. We’ve seen spikes in sales when customers do that, it’s in your face.” 

For limited-service or quick-serve concepts, that still holds true. But instead of at the door, operators should find some place “at the end of the aisle.” Get it in the line, before people are staring at the menu or getting out their credit card. 

“If it’s hidden behind the counter, people are not going to think about buying it,” said Chaar. 

Staff training is key, too. Just getting some cards and hoping people ask for them isn’t much of a strategy. Chaar said he went to a client’s restaurant once and asked if he could get a gift card. The employee said they didn’t have any. Obviously, that’s not great business. But incentivizing gift card and training the staff can be a real boon. 

“I think every company is different, some will do a contest for TVs or trips, whatever. Some will do spiffs or commissions. Some of our clients also have brand reps for their region, they’ll go out to B2B customers and sell that way,” said Chaar. 

He said one incentive has really proving useful this year and in recent holiday seasons: a little something for the giver to make that gift card enticing for both sides of the equation. 

“What we’ve done with some clients is created a bonus card. So the bottom card is worth $50, that’s the gift card. And then the piece on top, that is anything from a free appetizer or promo cards,” said Chaar. “If I’m going to spend $50 on someone, these cards stand out more because I get a little something on top.” 

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

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