What is a gift card program?
A gift card program is a system where restaurants sell prepaid cards that customers can use for future purchases, providing upfront revenue, attracting new guests, encouraging repeat visits, and boosting average spending while offering convenience and flexibility to customers.
How to Set Up a Restaurant Gift Card Program
Overview
For restaurant owners, gift cards aren't just an extra item at the counter - they're a strategic way to drive revenue and build loyalty. In fact, research shows that over 70% of consumers spend more than the value of their gift card when redeeming it, often turning a $50 card into a $65 or $70 check. That means each gift card is not only a guaranteed sale but also a chance to increase the average ticket size.
The appeal is widespread. Gift cards consistently rank among the most requested presents during holidays and special occasions, with the restaurant category being one of the top choices year after year. Digital options are growing rapidly too, making it easier than ever for guests to purchase and send them instantly. For a restaurant, this means broader reach, stronger cash flow, and steady opportunities to bring new faces through the door.
With the right steps, even a small restaurant can launch a simple, effective gift card system that supports long-term growth. This article will walk you through the process step by step, from selecting the right type of card to training your team and tracking results, so you can set up a program with confidence and clarity.
Step 1. Understand the Value of a Gift Card Program
Before diving into the technical setup, it's important to fully understand why a gift card program can be so valuable for your restaurant. At its core, a gift card is more than just a pre-paid meal - it's an investment in future customer visits and a tool for building long-term loyalty.
From a financial perspective, gift cards provide an immediate boost in cash flow. Instead of waiting for a guest to dine, you receive revenue upfront, which can help cover operating expenses or fund improvements. Even better, studies show that nearly 75% of gift card holders spend more than the card's value when they redeem it, turning a $25 card into a $35 or $40 sale. That extra spending directly increases your average check size.
Gift cards also act as powerful marketing tools. Every time someone buys a gift card, they're essentially recommending your restaurant to a friend, family member, or colleague. This word-of-mouth effect can introduce your brand to people who might not have discovered your restaurant otherwise. Plus, when customers come in to use a gift card, they often bring others with them - multiplying the impact of a single sale.
It's natural for some owners to worry about unused balances or "breakage." While unredeemed amounts can benefit your bottom line, the real focus should be on customer satisfaction. A well-structured gift card program is about creating convenience and delight for your guests, not just profit. By understanding this balance, you'll set the stage for a program that feels valuable to both your business and your customers.
Step 2. Choose Between Physical and Digital Gift Cards
One of the first decisions you'll make when setting up a gift card program is whether to offer physical cards, digital cards, or both. Each option has its strengths, and understanding the differences will help you decide what works best for your restaurant.
1. Physical gift cards are familiar, tangible, and easy to display near your register or on tables. Many customers still prefer having something they can hand to a friend or tuck into a greeting card. They also serve as subtle marketing tools - every time someone sees your branded card in a wallet or purse, your restaurant stays top of mind. However, they do require printing costs, secure storage, and the logistics of tracking inventory.
2. Digital gift cards are growing quickly in popularity. According to industry data, over 50% of consumers now prefer digital cards because they can purchase and send them instantly. They're also eco-friendly, convenient, and easy to integrate with online ordering platforms or mobile apps. For restaurants with tech-savvy customers - or those offering delivery and takeout - digital cards can expand reach far beyond the dining room.
The best solution is often a combination of both. Offering physical cards appeals to traditional customers, while digital cards capture those who prefer instant, mobile-friendly solutions. By covering both bases, you maximize flexibility for your guests and create more opportunities for sales.
Step 3. Select a Gift Card Provider or POS Integration
Once you've decided what type of gift cards to offer, the next step is choosing how to manage them. For most restaurants, the best approach is to work with a provider or integrate gift cards directly into your point-of-sale (POS) system. This ensures a seamless experience for both your team and your guests.
When evaluating options, start with ease of use. Your staff should be able to sell, load, and redeem cards without confusion or extra steps during service. Complicated systems can slow down transactions, frustrate employees, and create negative guest experiences. Look for intuitive platforms that fit naturally into your daily operations.
Cost is another key factor. Some providers charge upfront setup fees, while others take a small percentage of each card sold. Consider not only the immediate expense but also the long-term value. A system with reporting tools, fraud protection, and customer data insights may be worth a slightly higher cost if it helps you grow sales over time.
Integration also matters. A program tied to your existing POS makes tracking balances, redemptions, and reporting much easier. Without integration, you risk errors, duplicate work, and lost revenue. For restaurants that rely heavily on online ordering or delivery, choose a solution that supports digital gift cards as well.
Finally, think about scalability. Your program should be able to grow with you, whether you expand to multiple locations or see an increase in sales during peak seasons. Selecting the right provider upfront saves you the hassle of switching later and ensures your program can evolve alongside your business.
Step 4. Establish Clear Terms and Policies
A successful gift card program doesn't just rely on sales - it also depends on setting clear, transparent policies that protect both your restaurant and your guests. Without defined terms, you risk confusion, frustrated customers, or even compliance issues.
The first consideration is expiration dates. In many regions, laws prevent gift cards from expiring for at least five years, and in some states, expiration isn't allowed at all. Before creating your program, research your local and federal regulations to ensure compliance. Being upfront about expiration rules (or choosing not to have them) builds trust with your customers and prevents disputes at the point of redemption.
You'll also want to define usage restrictions. For example, can gift cards be used for alcohol purchases? Can they be applied to online orders or third-party delivery apps? Clear answers prevent staff from being caught off guard and ensure customers know what to expect.
Refunds and reissue policies are equally important. Lost or stolen cards are common, and customers often ask for replacements. Decide in advance whether you'll honor those requests, and communicate the policy clearly.
Finally, transparency is key. Display your terms on receipts, your website, and printed materials so customers understand how the cards work. A well-defined policy not only keeps you compliant with the law but also shows guests that you value fairness and clarity. By laying this foundation early, you'll avoid confusion later and ensure your program runs smoothly for everyone involved.
Step 5. Train Your Staff to Promote Gift Cards
Even the best-designed gift card program won't succeed if your staff doesn't actively support it. Employees are on the front lines, and their ability to confidently explain and promote gift cards directly affects sales. Training your team is not just about product knowledge - it's about giving them the tools to feel comfortable and authentic when talking to guests.
Start with the basics. Make sure every employee knows how the gift card program works, including how to load and redeem cards, what policies apply, and where cards are sold. A lack of clarity can lead to awkward moments at checkout or missed opportunities to sell. Providing hands-on demonstrations during staff meetings is often the most effective way to build confidence.
Next, focus on promotion techniques. Encourage staff to bring up gift cards naturally, especially during high-traffic times like holidays, birthdays, or anniversaries. Instead of hard selling, frame it as a suggestion - "If you're looking for a gift, we offer cards that work for both dine-in and takeout." Studies show that guests are more likely to purchase when recommendations come from trusted employees, making staff engagement essential.
Motivation also helps. Some restaurants track gift card sales by employees and offer small incentives, such as gift cards of their own, free meals, or recognition in team meetings. While incentives aren't required, they can foster healthy competition and keep the program top of mind.
When staff feel trained, informed, and supported, they'll be more effective advocates for your gift card program. That confidence translates into better guest experiences and stronger sales.
Step 6. Market Your Gift Cards Effectively
Once your gift card program is set up, the next challenge is making sure customers know about it. A strong marketing plan ensures that gift cards aren't just sitting by the register - they become a consistent revenue driver throughout the year.
Start with in-store promotion. Visible displays near the checkout, host stand, or bar remind guests that gift cards are available. Menu inserts or small table tents can also spark interest during dining. The key is visibility - if customers don't see the option, they're unlikely to ask.
Digital marketing is just as important. Feature gift cards prominently on your website and integrate them into your online ordering system. Use your email newsletter to highlight seasonal promotions, reminding subscribers that gift cards are a convenient, last-minute gift option. On social media, posts showcasing "perfect gift" messaging tend to perform well, especially during holidays.
Timing matters too. Industry data shows that nearly 60% of annual gift card sales occur in the last two months of the year, but birthdays, graduations, and other milestones create year-round opportunities. Consider running targeted campaigns during these peak periods to maximize results.
Finally, think about bundling. Offering small perks, such as "Buy a $50 card, get a $10 bonus card," can motivate higher purchases while giving guests an incentive to return.
By combining in-store visibility with online promotion and seasonal campaigns, your gift card program can shift from a passive option to a powerful marketing tool that drives steady sales.
Step 7. Track, Monitor, and Adjust Your Program
A gift card program is not a set it and forget it initiative. Ongoing tracking and adjustments are essential to maximize its impact on revenue and customer engagement. Here's how to approach it effectively -
1. Monitor Key Metrics - Track gift card sales, redemptions, and average spend per card. Analyze seasonal trends, peak purchasing periods, and whether guests typically spend more than the card's value. This data helps you forecast cash flow and plan targeted promotions.
2. Use Digital Tools for Insights - Leverage your POS or gift card provider's reporting tools. Many platforms offer real-time dashboards showing both physical and digital card activity, outstanding balances, and redemption patterns. This visibility allows you to make informed decisions quickly.
3. Gather Feedback from Staff and Guests - Employees often notice customer questions or pain points at the register. Similarly, guests' responses to promotions or incentives indicate what works and what doesn't. Collecting this feedback ensures your program meets both operational and customer needs.
4. Adjust Marketing and Incentives - Use insights to refine promotions, bonus offers, or placement of cards in-store and online. Experimenting with seasonal campaigns or highlighting digital options can drive higher engagement.
5. Refine Program Policies Over Time - Consider updating card designs, redemption options, or usage policies based on performance and feedback. Continuous refinement keeps your gift card program relevant, user-friendly, and profitable.
By following these five steps, you can create a data-driven, flexible gift card program that grows with your restaurant and strengthens customer loyalty.
Making Gift Cards Work for Your Restaurant
Launching a gift card program can feel overwhelming at first, but breaking it into clear, actionable steps - from understanding the value and choosing the right type of card to training your staff, marketing effectively, and tracking results - makes the process manageable. Gift cards offer more than immediate revenue; they are a tool for increasing customer visits, boosting average checks, and strengthening long-term loyalty.
To maximize the success of your program, having the right technology in place is crucial. Altametrics offers a comprehensive platform that integrates gift card management with your POS, providing real-time reporting, easy tracking, and actionable insights. With Altametrics, restaurant owners can simplify gift card operations, monitor performance, and adjust strategies based on data - ensuring every card sold contributes to growth.
Start turning your gift card program into a predictable revenue stream today. Explore Altametrics to streamline your operations, increase efficiency, and make every guest interaction count.
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Frequently Asked Questions
How can I promote gift cards on social media?
Highlight them as "the perfect gift," run holiday countdowns, or create limited-time offers to boost urgency and engagement online.
How do I choose the right gift card provider?
Look for providers or POS integrations that are easy to use, offer strong reporting tools, and can scale as your business grows. Costs vary, but a reliable system with fraud protection and data insights often pays for itself.
Why should my restaurant offer gift cards?
Gift cards provide immediate cash flow, attract new customers, and encourage repeat visits. Studies show that most guests spend more than the value of their card when redeeming it, which increases average check size.
What's the best way to market gift cards?
Use a mix of in-store displays, website features, email campaigns, and social media promotions. Peak times include the holiday season, but birthdays, anniversaries, and graduations also create strong opportunities year-round.
