STUDY: Inflation Forces Gift Card Changes for Restaurants, Guests

In 2022, dollars spent on gift cards rose 6% over 2021, a high-water mark for gift card value, yet the overall number of gift cards sold fell. That's according to the  Paytronix Restaurant Gift Card Report: 2023.

In 2022, people loaded on more value, choosing more cards of over $25 and fewer that are under $10.

Digital Demand

Consumers also showed a preference for digital gift cards, not only by purchasing more, but also loading them with higher values than on their physical counterparts. 

Since 2020, e-gift cards consistently made up 15-17% of gift card sales. Digital card sales also showed steady growth, with the number of cards increasing by between 6-15% year over year since 2019 

“Gift card purchasing appears to mirror that of loyalty guests. Our research shows that loyalty guests’ checks match inflation. From the beginning of 2020 to the present day, restaurant loyalty guest check size grew in tandem with menu prices,” Paytronix Strategy & Analytics Director Kirstin Lynch said.

While some of this change can also be attributed to customer preference and an overall shift in consumer behavior from quick-service restaurants (QSRs) to full-service restaurants (FSRs), some is driven by restaurant marketers.

“Brands themselves may be influencing the trend of higher-value cards by only selling higher-value cards or by making lower value cards less available,” Lynch noted.

Other report findings include:

• Average dollars loaded per gift card increased 8% from 2021.
• Digital cards outperformed physical cards in terms of value, with the average digital card loaded $82 more at a fine-dining establishment than a comparable physical card.
• Third-party retail sales grew, while in-store sales dropped, indicating a channel shift.

Card sales also showed a shift toward FSRs, with that segment showing significant growth, even as QSRs, the segment that best weathered the pandemic, showed a 5% drop in revenue. This trend was particularly apparent for fine-dining restaurants.

“Fine-dining gift card sales have not only recovered completely from the pandemic, they’ve also been the only concept to see an increase over 2019 numbers. This indicates a channel shift in consumer preferences – as guests emerge from the pandemic, they prefer to gift experiences at fine-dining establishments,” said Lynch.

Methodology

The Paytronix Strategy and Analytics team analyzed over 35 million gift card transactions worth over $2.2 billion to access the data found in the Paytronix Restaurant Gift Card Report: 2023. The report provides an in-depth look at annual restaurant gift card sales, with a focus on how the results from 2022 compare to those both pre- and post-pandemic. It examines gift card sales throughout the year, sales during holiday periods, sales by channel and service type, and redemption rates.