Customer experience management platform provider Paytronix released its annual restaurant gift card sales report, which found that gift card sales declined in 2020. They dropped 31.8 percent in 2020 compared to 2019, although in-store physical card sales declined the least, according to a Wednesday (Feb. 3) press release.
In-store card sales declined by less than 20 percent in contrast to 2019, while cards sold via third-party sales dropped 45.7 percent year over year. In addition, cards sold via corporate channels decreased by 36.5 percent.
“In-store sales realized the smallest decline in the number of cards sold between 2019 and 2020, which we attribute to some brands running successful promotional offers, like 10 percent off or bonus card offers, that were not available at third-party retailers,” Lee Barnes, head of data insights, Paytronix, said in the announcement.
Significantly fewer gift cards were sold during May and June in 2020 compared to the number sold in 2019 and 2018. As a number of eateries were just starting to reopen for on-premise dining after state-mandated closures took effect in March, the annual “moms, dads and grads” season proved to be a challenge for restaurants.
Also, gift cards were redeemed faster in the first 11 weeks after purchase in 2020 in contrast to 2019 and 2018. Following that 11-week threshold, cards that were sold in 2020 were not as likely to be redeemed compared to cards that were sold in 2018 or 2019.
QSRs almost matched their 2019 sales, realizing over 96 percent of the cards sold in that year. Furthermore, the average load amount on an eGift card to a QSR in 2020 was over double the average load for a physical gift card.
“The executives in the restaurant industry are some of the most creative and innovative in the business world, so our bet is that we’ll see a great recovery as we head into 2021. We’re also seeing the demand for convenience increase, which will have an effect on e-gift, physical gift cards and loyalty programs combined with stored value, as restaurants start to use all the levers of the single platform to drive visits,” Michelle Tempesta, head of product and marketing for Paytronix, said in the announcement.
A previous Paytronix report indicated that holiday sales from November and December encompassed 45.8 percent of all restaurant gift card sales in 2020 and approximately 48.6 percent of total gift card spend. The firm said the result was in line with the last three years, when holiday sales encompassed an average of 46.3 percent of all yearly gift card sales.
The research surfaces at a time when loyalty programs are evolving as online commerce becomes dominant and consumers seek out the best value. “Restaurant customers want to be able to receive loyalty and rewards points with the same ease as they browse menu options, order food and have it delivered or picked up,” according to PYMNTS’ newest Delivering on Restaurant Rewards report, a Paytronix collaboration.