Sweet eats: Restaurants serve up bonus-stuffed gift cards to combat slump
The nation's eateries want more card-carrying diners, anticipating they will get more cash registers to ring.
Restaurant companies pushed gift cards harder this shopping season, with more offering incentives and bonuses to buyers.
Denny's, for example, offers a $5 gift card to patrons who purchased $25 cards. Although it began the program last year, the chain began hyping it this year. IHOP made a similar offer. Many of the promotions continue through Wednesday.
The restaurants figure the cards help them reach more customers and boost business during the slower January and February, when the plastic is likely to be redeemed.
Chicago-based Lettuce Entertain You Enterprises has run such specials since initiating its gift certificate program about 20 years ago, said Sue Chernoff, vice president of marketing at the operation that has about 30 restaurant concepts, including Big Bowl, Shaw's Crab House and Maggiano's Little Italy.
The company offers a $25 gift certificate for each $100 gift card purchased. "It gives us a chance to sell gift cards and have people come back in the winter; generally a quieter time," Chernoff said.
Like retailers, Denny's pushed the cards as last-minute gifts at restaurants, online and at Wal-Mart and CVS stores.
"All of us have figured it out," said Nelson Marchioli, president and CEO of the South Carolina-headquartered Denny's Corp., which has about 35 restaurants in the Chicago area. "Those cards that you sell between Thanksgiving and New Year's Day are incremental sales. It helps us all in the restaurant industry."
Gift card users typically spend more than the values they have on the cards, and the shops need that additional money, Marchioli said.
The National Restaurant Association expects 2008 sales to fall 1.2 percent, to $552 billion, from last year.
"The restaurant industry is having to deal with the fact that consumer confidence isn't exactly what we'd like it to be," Marchioli said.