Industry Report

Restaurants Put Gift Cards on the Menu

YOUNGSTOWN, Ohio — A restaurant gift card can be the perfect holiday present. It’s an easy but personal way to treat a friend, family member or co-worker.

On the other side of the transaction, those little plastic cards bring rewards to restaurateurs, and not just as guaranteed revenue. As a marketing tool, it can be like putting a $50 bill (or $20 or $100) with a restaurant logo on it in someone’s wallet.

The gift cards are also an opportunity to get new faces into a restaurant, and maybe gain a new regular customer.

According to a study released this year by Fiserv, a Wisconsin firm that provides financial service solutions to thousands of small businesses, gift cards can boost revenue, foster customer loyalty and strengthen a brand. Cards from casual dining restaurants, followed by coffee shops, are the ones consumers desire most, according to the study.

And while digital gift cards continue to grow in popularity, physical gift cards are still preferred. Of those surveyed for the Fiserv study, 60% said they prefer physical gift cards or paper certificates to the digital versions.

While restaurant gift cards are something people love to receive, they can also be the holiday shopper’s best friends. They are an easy but much appreciated way to check off folks on a Christmas list.

“They have become the perfect Christmas gift,” says John Marino, owner-chef of Mojo’s American Pub and Grill and co-owner of Marino’s Italian Café along with his mother, Anna Marino. Both restaurants are on Mahoning Avenue in Austintown.

Sales of gift cards spike sharply at this time or year, says Marino and other area restaurateurs.

“Between both restaurants, we’ll easily sell at least 200 cards,” Marino says, adding that the most common amounts purchased are $30 and $50, with the occasional $100.

A common practice among just about every restaurateur is to add to the value as an incentive. For example, Marino throws in a $10 gift card for every $50 card purchased. While most gift cards have no expiration date, recipients start using them almost immediately. “We see them returning mostly in January and February,” says Marino.

At Mojo’s, an extra dimension comes in the fact that the restaurant’s basement is the location of the Comedy Cellar, a comedy club Marino also owns.

“People come in for a comedy show/dinner package and use them, or else they just use them for drinks after the show,” Marino says. “We see a lot of them on comedy show nights.”

Marino expects sales to be steady despite the closing of the GM Lordstown plant. 

“Austintown and Warren are the hardest hit and people have gotten a little more conservative in their spending,” he says.

Marino’s Italian Café marked its 40th year in 2019, placing it among the area’s longest-lived family restaurants.

Another such place is Vernon’s Café in Niles, which might just be the leader when it comes to sales of gift cards. Chef and owner Vernon Cesta opened the Italian restaurant on Youngstown Road more than 20 years ago. 

He says he sells thousands of gift cards every year, with promotional periods in July and the Christmas season when a $20 gift card is added to every $100 spent on cards.

Vernon’s card buyers typically choose $40 or $50 amounts, and occasionally $75, says Cesta, who says the redemption rate is close to 95%.

“They come back right away to use them,” he says.

When asked the reason for his robust card sales, the reply came quickly.

“We treat everybody like family,” Cesta says. “We have lots of loyal customers.”

Cesta is a second-generation restaurateur, who started working for his father in 1968 when he was a youth. In 2011, he opened his second restaurant, V2, in downtown Youngstown. Much like Vernon’s, V2 has also become a fixture.

The manager of V2, Kevin Deckant, says the holiday season is easily the best time for gift-card sales, noting that his restaurant will sell upward of 100 cards in the next few weeks, mostly in the $25 to $50 range. Under a seasonal promotion, buyers get a $5 card for every $25 they spend.

V2 is a popular spot for downtown office workers, and they account for a lot of their gift card sales, Deckant says.

“It’s a good gift,” he continues. “You’re buying a meal or drinks for someone who may be hard to shop for, and it’s especially good if they work downtown.”

Deckant says that fewer than 2% of the gift cards go unredeemed.

One of the longest-lived restaurants anywhere is Café 422, on the Strip in Niles, which marked its 80th anniversary this year. Black Friday brings a deluge of gift-card purchases, says Serdar Dede, owner of the restaurant. 

“We do tremendous numbers during Black Friday,” he says. “People who have come by the restaurant for years and years will buy cards for friends and family.” 

The cards have a way of reintroducing folks to Café 422, Dede says, who sees them as a win-win situation for regulars, guests and the restaurant itself. His Black Friday promotion, now in its third year, is the main reason for the sales jump. For three days only, Nov. 29 to Dec. 1, a $100 gift-card purchase gets the buyer an extra $50 card.

On Dec. 2, another promo takes over in which a $100 gift card comes with another $25 card. The promotions are good at both Café 422 locations: the original and the Boardman site on South Avenue.

While the restaurant’s other gift cards have no expiration date, those purchased under Café 422’s Black Friday weekend promotion must be used within one year, Dede says.

The Courthouse Inn, next to the Columbiana County Courthouse in Lisbon, is one of the area’s finer and most unusual restaurants. It’s a beautiful spot and its vegetarian menu uses only organic food, most of it locally grown, that has never been frozen.

The Courthouse Inn sells a couple-hundred gift cards every holiday season. Because it’s a destination restaurant, 100% of those gift cards get used, owner Renee Lewis says. 

“It’s not like going to [a chain restaurant],” she says. “When you get one from us, you use it.” Courthouse Inn customers, she explains, are not the type who arbitrarily wander in.

With that in mind, the restaurant does not offer promotions where the buyer gets a bonus amount.

Jacked Steakhouse opened in August on Courthouse Square in Warren. With its exposed brick walls and ample bar room, it’s an attractive spot well positioned to take advantage of downtown Warren’s resurgent nightlife scene.

“We’ve made a quick impact,” says Mike Theodore, general manager of Jacked. “We’ve sold quite a few gift cards already.”

Pictured: John Marino says Mojo’s will “easily sell at least 200 cards” during the holidays.

Copyright 2019 The Business Journal, Youngstown, Ohio.