62% of consumers want restaurant gift card for holidays, NRA finds

Dive Brief:

Sixty-two percent of consumers hope to receive a restaurant gift card for the holidays, according to new research from the National Restaurant Association. Of those consumers, 62% want a gift card to their favorite restaurant, while 20% want to try a new spot.
About one-quarter of consumers said they would use a gift card as soon as possible, while 38% said they would use it within a few weeks and another 38% said they would save it for a special occasion.
In another recent survey from Blackhawk Network, 83% of consumers said they want to give a gift card, and surveyed shoppers plan to buy 15 gift cards on average.

Dive Insight:

The restaurant category is one of the most popular for gift card shoppers this year, which is good news for the industry as consumers plan to spend over 40% of their holiday gifting budget on gift cards — a 27% jump from last year's gift card spend, according to Blackhawk Network.

Restaurant gift card sales have already been climbing this year. An August report from Paytronix found that the number of cards sold in May and June was up 54% over the same period in 2020.

This uptick makes sense, given how gift cards cater to pandemic-era diner trends. Digital gift cards, for example are contactless and allow consumers to order for takeout or delivery with ease. More than half of diners (64%) surveyed recently by BentoBox said they will consider ordering in instead of dining out as the holiday season approaches.

The rise of digital ordering has also pushed more restaurants to offer digital gift cards. In a statement, NRA SVP of research Hudson Riehle said technology makes gift cards easier to share as a gift, and that is especially true this year. According to Blackhawk's research, since March 2020, 59% of consumers surveyed have started or increased their use of digital wallets and 43% started using or increased their use of digital gift cards.

There are benefits for restaurants as well. Gift cards can provide an incentive for diners to order out during typically slower winter months — providing a revenue lift for restaurants in a challenging time. Over eighty percent of consumers who redeem their gift cards at fine dining and fast casual restaurants spend more than the value of that card when using one, according to Fiserv research.

As such, several chains are promoting gift cards ahead of the holiday season. Subway is offering a free six-inch sub for every $25 in gift cards purchased in-store or online, for instance. WOWorks Restaurants, parent of Saladworks, Frutta Bowls, Garbanzo Mediterranean Fresh and The Simple Greek, has introduced a $5 bonus gift card for every purchase of a $25 gift card during the holidays. Grimaldi's is offering a $10 bonus card for customers who purchase a $50 gift card, while Red Lobster has also launched a "Give a Gift, Get a Gift" gift card promotion in which guests receive a $10 coupon for every $50 spent on gift cards.

Gift card sales could bring potential complications for some restaurants, however. An influx of gift card purchases is a great short-term boon, but those restaurants won't be able to anticipate when those cards will be redeemed. If the cards are used in a flurry, an unexpected traffic bump could further squeeze an already-pressured supply chain.