Restaurant Briefing: Restaurant Gift Cards Are A Growing Holiday Custom

Promote Your Business Restaurant Industry By American Express December 14, 2014

“Give experiences, not things.” In a consumer culture crammed with too much stuff, more and more holiday gift-givers are heeding that advice. In particular, restaurant gift cards have become popular holiday gifts. They’re personal enough to show the giver understands something about the recipient’s lifestyle, but they’re also universally appropriate because just about everyone—young or old, rich or poor, Republican or Democrat—enjoys dining out.

From the operator’s point of view, year-end restaurant gift cards are an important factor in filling dining rooms during the slow post-holiday winter months. Most consumers report that they redeem restaurant gift cards quickly—within a few weeks or a month. In fact, today’s consumers report redeeming gift cards more
quickly compared to consumers polled a year ago.

Restaurant Briefing: Gift Cards

GIFT CARD GIVERS AND RECEIVERS: THE DETAILS
About half of consumers report that they gave at least one restaurant gift card this past holiday season, and more than six out of 10 report they received at least one such gift over the holidays. Both the proportion giving restaurant gift cards and the proportion receiving them were up from the previous year.

Restaurant Briefing: Gift Cards

Restaurant gift cards usually aren’t purchased in bulk. Most people gave or received only one or two of these cards; only a quarter report purchasing four or more such gift cards, and only a fifth received that many during the holidays. Purchasers reported a median dollar value of $70 for all the gift cards they gave; receivers reported a median value of $50 for all the restaurant cards they were given over the holidays.

Restaurant Briefing: Gift Cards

Restaurant gift cards are primarily given and received between members of the immediate family and extended family as well as between friends. But they are also considered appropriate for work relationships. For instance, about an eighth of respondents who received gift cards this past holiday season reported getting one from their employer; similarly, about an eighth of givers presented a restaurant gift card to someone in a position to provide services to them or to their family—a teacher, nanny, housekeeper, etc. Finally, the universally appealing nature of restaurant gift cards makes them a good choice for charity raffles as well as “Secret Santa” or grab-bag gifts that might end up with anyone.

Restaurant Briefing: Gift Cards

WHY CONSUMERS CHOOSE RESTAURANT GIFT CARDS
There’s no doubt that restaurant gift cards are a broadly appealing present, but what are the primary reasons consumers choose them? Half of gift-card purchasers named convenience as a key motivator—up notably from consumers polled a year ago. Knowing that the recipient enjoyed the restaurant was the #2 motivator, but this consideration held less sway than it did among consumers polled last year.

Restaurant Briefing: Gift Cards

What makes a restaurant gift card purchase convenient? We asked consumers where they bought these gift cards and in what form. Fewer than half went to the restaurant to purchase cards for the holiday season just past (48%, compared to 53% a year ago). Instead, purchasers picked up their cards at a supermarket, drugstore or mass merchandiser; 6% went to a gift-card exchange website such as Plastic Jungle or Cardpool, and 13% went to the restaurants website. (We also asked gift-card recipients the forms in which they received cards; while the vast majority were plastic cards loaded with a preset amount, 7% reported receiving an e-card and 13% said they received a paper certificate.)

Restaurant Briefing: Gift Cards

THE BONUS CARD FACTOR
Among the many possible motivations for choosing a restaurant gift card, the one that came in last was the possibility of receiving a bonus gift card—a lure noted by only 7% of gift-card givers, half the proportion who mentioned it a year ago. Nevertheless, three out of 10 gift-card givers reported receiving a bonus card; of those who walked away with a bonus card, more than four out of 10 said it was a very or somewhat important consideration in their decision to purchase a gift card from that particular restaurant rather than another.

Restaurant Briefing: Gift Cards

Interestingly, more than half of these bonus-card recipients used the bonus card for another gift, compared to just three-tenths of those who received a bonus card last year. (Another 7% said they received multiple bonus cards and split the difference, keeping some for their own use and giving others away as gifts.)

Restaurant Briefing: Gift Cards

WHY NOT A RESTAURANT GIFT CARD?
Despite the wide appeal of restaurant gift cards, some gift-givers shy away from them. We asked the approximately half of consumers who did not give any restaurant gift cards over the holidays their reasons for avoiding this type of gift. The most frequent reason given was a desire to choose more personal gifts; in fact, this motivator showed up as considerably stronger for today’s consumers than for those polled in either 2013 or 2012.

Restaurant Briefing: Gift Cards

Bottom line: Restaurant gift cards have broad and growing appeal, particularly as gifts for the winter holidays. However, there are ample opportunities
for restaurants to tweak their gift-card offerings to gain market share.

 

Source: Technomic, Inc.