November 17, 2014 |

Making Gift Cards pay off

By Alyson McNutt English

fralo gift card

Play your cards right, and they’ll be a gift to your holiday bottom line


Gone are the days when gift cards were considered poor presents; now it’s not uncommon to find that a pre-paid pass to a favorite store or restaurant is at the top of someone’s wish list. According to the National Retail Federation, 61 percent of gift card recipients spend more than the amount of their gift card. So selling gift-cards, then getting the gift card recipients in the door, is a win-win.

Chuck Cinelli, owner of Coco’s Italian Market and Coco’s Cafe in Nashville, Tennessee, offers a little holiday help for the area’s time-strapped residents as an incentive to buy gift cards for his restaurants. “Around the holidays, I go and get those big boxes of holiday cards at Sam’s or Costco,” he explains. “Then I offer a free Christmas card with every purchase of a gift card of $20 or more.” Cinelli says he’s seen a lot of success selling gift cards, which can be used at both of his locations, with this small promotion.

Even though he only really pushes gift card sales around the holidays, he says the stores reap the benefits all year long. The long life the gift cards live is one reason he’s a proponent of the switch to plastic from the older paper certificates. “These plastic gift cards, they’ll be in someone’s wallet, in their dresser drawer, for months, and they see the logo, they’re thinking about it,” he says.

That’s not to say, however, that Cinelli has eschewed paper certificates altogether. “I do have some paper gift-certificates, shaped kinda like dollar bills,” he laughs. “They’re in like, five- or ten-dollar denominations, and I hand them out kind of like business cards to some people.” But those, of course, he doesn’t sell over-the-counter.

But do customers really reload their gift cards? In some cases, yes, quite commonly, says Natasha Miller, director of marketing for Giftfly, which specializes in selling custom online gift cards. Miller has worked with restaurants and other retailers to sell gift cards for more than 15 years, and she says one of the top targets for gift-card reloaders are parents.

“Parents are the perfect target market for reloadable gift cards, especially during back to school times for college students,” she says. Parents will often reload gift cards for students so they know they’re eating well, for example. Particularly for Italian and pizza restaurants that deliver, parents might reload around university finals time, when they know kids will be studying and won’t be leaving their rooms much.

Miller says she’s also seen some families use gift cards as a way to better manage their food spending, or as a way to treat themselves without going overboard. “People will reload these gift cards sometimes for personal use or as a little gift to themselves,” she says.

The general consensus among the owners who use plastic gift cards is that it is easiest to simply integrate them into your POS system. It cuts down on human error, and it’s as simple as swipe or scan –– either the balance is there or it’s not. Even mobile systems like Square offer the option to accept gift cards now. In fact, most any POS system will have a way for you to relatively easily integrate your plastic gift cards into your pre-existing set-up.

While not every one will run exactly the same way, your POS system’s support should be able to help walk you through how you would integrate gift cards into your existing setup. Generally, you will just use the POS system to add the gift product like it’s a normal sale, typing the amount of the gift card into the field where you’d record the amount of the sale. For pre-printed cards, most POS systems will ask you for the gift card’s serial number (either by swiping or typing it in) which will allow you to track that card’s balance. When someone redeems that gift card, you would activate your system like a normal sale, choose the gift card payment method, swipe the card/type in the serial number, and confirm the amount.

Encouraging gift card sales can be a boon for business, since the restaurant makes the money at the time of purchase. And while the bottom line benefits with that sale regardless, the biggest bonus of gift cards can be getting new customers in the door in what for them is a risk-free new food adventure, but for you can end up being a repeat customer.

Alyson McNutt English is an award-winning freelance writer specializing in home, health, family, and green topics. She is based in Huntsville, Alabama.