The Gift That Keeps Giving
Tips for Unwrapping More Revenue With Gift Certificates

    In your nightclub, tavern or bar, gift certificates can be a great revenue producer during the entire year, but gift certificate purchases really will increase around birthdays, graduations and holidays, especially prior to Christmas. It is a great idea to feature a gift certificate sale right after Thanksgiving, for potential Christmas presents.
    December can be the busiest month of the year if you handle gift certificates effectively. Let me tell you about a good promotion. Here are the details:
    If the guest purchases a minimum increment of $100 in gift certificates between Thanksgiving and December 30, the guest will receive a post-dated $20 “bonus” guest certificate free. This bonus is a great way to boost your December sales. 
    Some restrictions apply to the bonus guest certificates. The bonus guest certificates are only good from January 1 until March 31 of the next year and cannot be redeemed for cash. This is designed to drive your business on the first three months of the year, which are traditionally three slow months.
    This promotion brings business in during this slow time and it encourages and drives sales during December. The minimum of a $100 purchase increases the guest transaction size.  Those customers who used to spend $50 or $75 on gift certificates will now spend $100. 

Success Story
    Let me tell you a good story about how effective this promotion can be.
Bruce Goode, owner of Adventures Sporting Café & Pub in Wisconsin, had a very successful gift certificate promotion last year. Goode refers to it as the “Moron Card.”
    He sent out a Christmas card right before Thanksgiving that included an insert for buying gift certificates for Christmas. He sent out 3,000 cards but with the wrong expiration date.  Instead of starting the sale on December 1, he started it on January 1.
Bruce realized this two days after the mailing.
    So, Bruce sent out another postcard with a picture of him holding one of the Christmas cards with a very exasperated look on his face with the headline reading, “Wrong date, you moron!”  The card then explained the correct information.
    “This was the best mistake I ever made,” Goode says. “We had a very good December with gift certificate sales soaring to more than $5,000 above any previous year, and the redemption rate was about double an average mailing.”
    The second card was extremely successful. Bruce said nearly 50 customers called him a “moron” the first Friday Night at the front door, and he says he still hears about it today when he sends out mailings. His customers ask, “Did you get the date right this time?”  From a guest perspective this was a very successful promotion, and they all had a lot of fun.
He says, “If you’re willing to make fun of yourself, it seems to work.”
    Remember, the guests are giving these gift certificates to their friends because they like your business. You are probably bringing in a lot of new customers as the gift certificates are redeemed. One of the biggest benefits to a gift certificate program is that one of your guests is recommending your business to their family, friends or associates.
    Gift certificates make ideal, last minute Christmas gifts for customers who have hard-to-shop for friends or relatives. A gift certificate is always considered a welcome gift, while other gifts may end up being ignored, not appreciated or returned. Christmas gift certificate sales also encourage year-round gift certificate purchases. When customers receive compliments about their gift certificate gift, they return to purchase more gift certificates for birthdays, anniversaries and other celebrations.

Bonus Discounts
    Try posting a sign that says: “SPECIAL HOLIDAY VALUE: Purchase $100 in Gift Certificates and Receive $20 in Bonus guest certificates. Sale Expires December 30.”
    You may think that $20 is a big discount, giving a $20 added bonus guest certificate. But, you need to understand that ultimately 50 percent of the guest certificates do not get redeemed.  The 16.66 percent discount amounts to only about 8 percent, because not all of these guest certificates get used. The sales results will be very impressive. If the guest does not have a preference, I would give them five $20 gift certificates and one $20 guest certificate for $100.

Gift Certificates
    Gift certificates are a more dignified form of discount, and they also make good in-house prizes for contests and drawings.
    Carefully look at how you merchandise your gift certificates. Make it easy for customers to buy them. Don’t hide them in a back office or in the cash register where employees have a hard time finding them. The less time customers have to wait to buy gift certificates, the more you will sell.  It’s essential you train your employees to promote gift certificates by word-of-mouth. 
    If employees look at gift certificates as annoying pieces of paper that have to be filled out and dug out from the back, then you won’t sell many. If employees make it a hassle for customers to buy, then customers won’t be enthusiastic about purchasing them. 
Put gift certificates right at the front, train everyone to process them properly and explain to your employees how important these extra sales are to your business.
Whatever number you select as your largest denomination gift certificate will tend to limit the amount customers spend on individual gift certificates.
    The ideal way however, to appeal to both those seeking the convenience of small, preset denominations and those others who may need a $21 gift certificate for a 21st birthday, etc., is to offer both types of gift certificates. Think about dollar bills versus checks. So consider the preset denominations in $1, $5, $10, $25, $50, etc., but also have open-value gift certificates that can be sold like checks. 
    Also, do not just restrict gift certificate sales to Christmas, even though that period is the most popular. People have birthdays and anniversaries all year-round.                     NCB

Ron Wilkinson is the founder of NightClubandBarMarketingGroup.org (no relation to Nightclub & Bar magazine), which specializes in maximizing sales and profits for their clients. For more information, call (888) 776-3484 or visit the site.