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Restaurant gift card sales surging

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August 16, 2021

Restaurant gift card sales appear to be making a strong recovery after a trying 2020, according to the Paytronix Mid-Year Gift Card Report 2021. It found that 2020 redemption rates weren't far behind those of 2019, demonstrating steadfast consumer demand more than 15 months after the onset of the pandemic, according to a company press release.

The number of cards sold in May and June was up more than 54% over the same period in 2020, representing 91% of 2019 gift card sales for the same two months, indicating a healthy recovery.

"Gift card sales from the spring holiday season — the first since the pandemic began to wane — show promising recovery," Lee Barnes, head of Data Insights for Paytronix, said in the release. "This surge happened even as many areas still faced pandemic restrictions. All of this provides a good reason to expect a strong winter holiday sales season."

The report examined year-over-year comparisons of gift card sales during the spring holiday period, as well as six-month redemption curves based on factors like service type and card type. Highlights included:

• The redemption rate for gift cards sold in 2020 tracked higher during the initial seven weeks after purchase, as compared to 2019 and 2018. But after the nine-week mark, 2020 gift cards were redeemed at a rate that was slightly lower than 2019 and significantly lower than 2018. Because the majority of gift cards were sold at the end of the year, those that would have been redeemed in the early months of 2020 were likely impacted by the rise of COVID-19 in the U.S.
• QSRs saw redemption rates decline the least. Although gift cards sold by QSRs in 2020 were redeemed 3.6% less often through six months when compared to 2019, this difference was considerably smaller than those for casual-dining and fast casual restaurants, which saw redemption rates fall by 5.4% and 5.8%, respectively.
• Fine-dining gift cards were actually 0.9% more likely to be redeemed within six months than those sold in 2019.

Based in Newton, Massachusetts, Paytronix is a provider of SaaS customer experience management solutions for restaurants and convenience stores.