News
Cash in on cards
Gift cards can add to holiday cheer, but operators need to ask the right questions when exploring options.
September 27, 2007
If you don't have a gift-card program in place at your restaurant, now may be the best time to take the plunge.
Although gift cards can be sold year-round, the holiday season is typically the biggest time of the year for gift-card sales. However, before an operator signs with a gift-card vendor, several things need to be considered.
"It's very important that restaurant operators talk to their POS provider directly about gift-card support and don't rely on what they hear from the gift-card company," said Jennifer Wiebe, marketing manager with Lynden, Wash.-based SpeedLine Solutions Inc.
Gift-card processors rarely set out to mislead operators, Wiebe said, but sales reps don't always understand the importance of being able to integrate gift-card processing with the POS system.
Integrated with the POS, gift cards are as easy to process as a credit card, Wiebe said. Gift-card sales also are easily tracked through the point-of-sale system, and gift-card providers typically give restaurant operators access to additional reports online.
With many gift-card processors, POS integration means that operators can activate, redeem and add value to a customer's card, as well as check card balances via the operator's POS system.
Although restaurants also can set up gift-card processing via a standalone reader, processing them directly through the POS is faster and cheaper — as well as potentially more accurate and secure, Wiebe said.
"I've talked to a couple of restaurant executives who've had their gift card programs derailed because they unwittingly hooked up with a gift-card processor that their POS doesn't support," she said. "They will save themselves a lot of pain down the road by selecting a processor that's already certified and proven to work with their POS."
Cards growing in popularity
According to a survey by the Washington, D.C.-based trade group National Retail Federation, spending on gift cards has risen from $17 billion in 2003 to nearly $25 billion last year. And nearly 53 percent of survey respondents said they would like to receive a gift card as a gift.
The popularity of gift cards has increased at a remarkable rate," said Tracy Mullin, NRF president and CEO. "Consumers love gift cards because they take the guessing out of holiday shopping and retailers love them because they are easy to stock and take up minimum shelf space."
The average gift-card buyer purchases four cards during the holiday season, each averaging about $40 in value, according to the NRF.
Eugene, Ore.-based Abby's Legendary Pizza began selling gift cards, or "Legendary Loot," in 2005. Doug Phillips, Abby's director of marketing, doesn't see any downside to offering gift cards, which are imprinted with the company's logo.
"On our POS system, the card swipe is right on the monitor and it's a simple process to select gift cards as a payment type," Phillips said. "We are able to use the same system whether it is a gift card or a credit card."
Abby's worked with Givex, a Toronto-based provider of card-management technology, to implement its gift card program. Abby's uses a POS system from SpeedLine Solutions.
Each day, Phillips receives a report from his vendor on how many gift cards each restaurant has sold. He also can tell when and where cards are used once they're sold.
"Our gift cards have been a success not only from the operations standpoint of handling them vs. paper certificates, but also because of the ability to use the card as a branding tool," Phillips said. "For us, it's been nothing but positive."
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