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Gift Certificates: Post-Holiday Redemptions |
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Written by Mike White
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Thursday, 07 February 2008 11:49 |
With the holidays behind us, operators are quickly shifting their focus to a prosperous 2008. The first thing you will encounter in January and February is gift certificate redemptions. Many operators look at this event as a necessary evil and not the revenue windfall it can be. The initial train of thought is that I am now incurring the cost of serving food and beverage on revenues I received in November and December of last year. I have to pay my vendors, staff and utilities and I have limited revenue coming in. This does not give many operators a warm and fuzzy feeling.
Time to change the way you look at things! Operators need to look at this as an opportunity to turn on new guests to your restaurant. Think about who buys these gift certificates - your regular customers, people who have heard good things about your restaurant, consumers who think highly enough of you to treat your brand on the gift card as a great present. And last but not least, your staff. All of these scenarios are going to bring you guests that will have high expectations and a great opportunity for you as an operator to not only meet their expectations but also exceed them. Thus in turn you’ll have a new regular customer. Give some thought to how many marketing dollars it would take you to bring in more that plus new customers in a 60-day period.
This creates a need for you to refresh or educate your staff on up-selling to maximize your check average. Think about re-pricing your wines that have sat in inventory for more than four months aggressively in the first quarter of 2008. Wine will not produce revenue sitting in inventory, so get rid of it and make some money. Many other positives come along with gift cards and here are a few that come to mind:
Over 27% of restaurant gift cards are never redeemed.
30% of redeemed gift cards will have a balance, generating a second visit from the customer or possibly
non-redemption.
62% of gift cards exceed the amount issued and 38% exceed the initial amount by $50.00 or more.
Your bar and wait staff will typically see an increase of 5% - 10% in the gratuity.
It can’t all be good right? Well, I am the pessimistic Loss Prevention guy and after all they want me writing to alert and inform subscribers. Unfortunately gift cards open an opportunity for your staff to pilfer. I recommend that as a manger or owner you incorporate a policy of table visits for every gift card redeemed. This will accomplish many things. First, it will give you the opportunity to meet and great the guest. Second, it will curtail wait staff from using a stolen card in place of cash. Third, it prevents the wait staff from keeping a low balance card and redeeming it on a future cash check.
The gift card business is a great way to build your customer base, which in turn creates future revenues for your restaurant. Think of your gift card business as a wonderful opportunity to sow seeds that will bear a fruitful crop harvest instead of the miserable no revenue time of the year. How do you want your guests to perceive you?
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Last Updated ( Monday, 18 February 2008 18:09 )
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Loss Prevention