Get Ready for Holiday Gift Card Sales

Gift cards are an enormous opportunity for restaurants and retailers. According to Persistence Market Research, the international gift card market is predicted to grow from $318 billion in 2017 to $506 billion by 2025. Gift cards are a great way for restaurants and retailers to promote their brands, acquire new customers and/or get existing customers back in the door.

Gift card sales tend to peak over the holiday season when people are looking for an easy-to-buy and deliver gift. In anticipation, restaurants and retailers need to prepare their gift card offerings — both in-store and online — well in advance of the holiday season.

For the past two years, digital guest experience platform provider Paytronix Systems has published research that follows trends in closed-loop restaurant gift card sales. The Paytronix Annual Gift Card Sales Report: 2019 includes data from 2017–2018 gift card sales from 220 brands, and compares those figures to the findings of its 2018 report, which tracked 2016–2017 gift card sales from 190 restaurant brands.

Zeroing in on the holiday season, the Paytronix report finds that gift card sales between Nov. 1 and Dec. 24th pick up for the holiday season around mid-November, with the first noticeable spike of sales in 2016–2018 data on Black Friday.

The report also finds that gift card sales drove a large portion of the increase in card sales from 2017 to 2018 as the popularity of gifting stored-value cards continued to grow. Holiday sales account for over 50 percent of annual e-gift card sales. While the average increase in card sales throughout the year was around 6.3 percent, during the holiday months (November and December) gift card sales increased over 15 percent from 2017.

Both in-store and discounted gift card sales routinely increase during the holiday season. Third-party retail sales, which accounted for more than 25 percent of card sales throughout the year, decreased to only about one-fifth of sales during the holidays, while in-store sales increased to over 55 percent of cards sold during that time.

If they hope to take advantage of the growing trend of gifting stored-value cards during the holidays, retailers need to have a large stock of gift cards on hand before Thanksgiving. With the ease and accessibility of virtual stored-value cards, they're a great gifting option for last-minute holiday shoppers — and a simple method of increasing sales for retailers.

Adopting a gift card program is a winning strategy for multi-unit restaurants, retail stores, and convenience store chains. However, alongside the ability to easily create, sell and manage gift cards, retailers also need to provide exceptional customer experience with every interaction. Whether the customer touchpoint is in-store, via a mobile device, social network, or online, the experience should always be consistent. In fact, the most successful gift card programs are those that make it easy for guests to buy them, whether in-store or online.

The Paytronix report covers more than holiday gift card sales. It also takes an in-depth look at sales by channel, service type, and anticipated redemption. It reveals new insights on e-gift cards, such as average load to a virtual stored value card and how restaurants can anticipate their e-gift card sales to look during the busy holiday season. With the growth of e-commerce, the report also examines the impact of gift cards redeemed online.

A well-run gift card program will make a significant impact on overall restaurant and retail sales. Gift cards are effective sales tools across all restaurant types, and developing a multichannel program that includes both traditional and e-gift cards will boost overall restaurant sales, especially during the holiday season.

Michelle Tempesta is head of marketing at Paytronix Systems, Inc., developer of the most advanced digital guest experience platform.