Consumers spend a fortune on gift cards every year. According to Capital One, the global gift card market reached $1.24 trillion in 2024 and is expected to top $2.31 trillion by 2030. And it turns out that restaurant gift cards make up a huge chunk of that value.
According to the Capital One consumer survey, 52 percent of all respondents say that they buy restaurant gift cards. So obviously, consumers like restaurant gift cards.
- But are gift cards actually good for your business?
- Are there benefits to marketing restaurant gift cards online and in-person?
- Is there anything you need to be aware of before your restaurant begins offering gift cards?
To find out, we connected with our Back of House panel of experts. Read on to find out exactly why you need to add gift cards to your business.
Our Panel of Experts
- Ashley Dunn, Senior Marketing Coordinator
- Rachel Morgan, Industry Consultant and Operations Expert
- Spencer Michiel, Industry Consultant and Restaurant Tech Expert
What We Learned About Restaurant Gift Cards
Spoiler alert: Every one of the experts on our panel agreed that selling restaurant gift cards is a good idea.
- Ashley says “Gift cards are a great way for your restaurant to earn more.”
- Rachel calls gift cards “A powerful tool for driving both upfront cash flow and customer loyalty.”
- Spencer says “There are very few cons to selling gift cards.”
But what should you know about restaurant gift cards before you start selling them to your customers?
Restaurant Gift Cards Pay Off Now and Later
As Spencer explains, “you're making a sale on a future transaction.”
Of course, you’re putting money in the bank the minute you sell that gift card. But that gift card also promises to bring future customers through the door. “And when you sell a $100 gift card,” says Spencer, “You know the guest is going to come in and pay more than that.”
Not only that, but according to a Toast consumer survey, 64 percent of respondents say they’ve discovered new restaurants by using gift cards. So that means that the transaction tied to the gift card could be just the first of many with a new repeat customer.
Restaurant Gift Cards Are a Hit During the Holidays
According to a survey by the National Restaurant Association (NRA), gift cards are an especially popular option around the holidays. An NRA survey of shoppers during the 2024 holiday season found that 59 percent of all adults intended to give restaurant gift cards to friends and family.
That number is even higher among younger consumers, with 70 percent of millennials and 74 percent of Gen Z adults saying they planned to include restaurant gift cards on their holiday shopping list.
“That’s why I really like gift cards as stocking stuffers during the holidays,” says Spencer. “All those holiday sales are huge in the New Year, because that’s when they all get redeemed. That’s typically a slower time of year, but you could be busy all January and February when your gift card redemptions come in.”
Restaurant eGift Cards Are Growing in Popularity
Not only are younger consumers more likely to buy gift cards during the holidays, but they are also driving the popularity of restaurant eGift cards.
“Your restaurant should absolutely offer gift cards,” says Rachel, “especially eGift cards. They’re easier for customers to purchase and they can be delivered instantly. That makes this a pretty good option if you’re a last minute shopper.”
“And,” says Ashley, “with the rise of tap to pay options, I find myself leaving the house more and more often with only my cell phone. That’s why my favorite gift card options are the ones linked to the reservation platform. This means that as a customer, there's nothing I have to remember to bring with me.”
Beware of Unused Gift Cards
While Spencer doesn’t see a lot of drawbacks to selling gift cards, he does offer one word of caution. But this advice is pretty specific to those who are considering purchasing a restaurant that is already in operation.
“If you're looking to buy a restaurant, and there's a large chunk of gift cards just floating out there, that's got to be incorporated into the negotiation on the sale,” says Spencer, “because you're gonna have to redeem all those.”
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Actually, the number of unredeemed gift cards floating out there in the universe is pretty significant. According to Capital One, roughly 43 percent of Americans are sitting on unused gift cards, totalling more than $23 billion in value. So if you’re taking over an existing business, beware of this potential hidden cost.
New Technology Is Making It Easier for Small Restaurants To Sell Gift Cards
The good news is, there are no hidden costs for restaurants that use the right technology.
“Modern POS [point of sale] systems have made it much easier to track unredeemed balances and manage promotions,” says Rachel. “That used to be a real hassle. “
Now, even small businesses and independent restaurants have access to the technology used for creating, selling, and tracking restaurant gift cards online and in person. With the right tech at your fingertips, it should be fast and easy to set up and automate the sale of restaurant eGift cards before the holiday season hits.
Make Sure Your Tech Can Support Restaurant Gift Cards Online and In-Person
A Toast consumer survey finds that the largest proportion of respondents prefer to purchase gift cards through a restaurant’s website. So if you’re thinking about offering gift cards, you’ll want to be sure that both your restaurant’s website and your POS system can support this option.
If your website and POS platform don’t have these capabilities, it may be time to upgrade your technology. Reach out to our in-house restaurant tech experts and schedule your free personalized consultation today.
