Marketing

Physical vs Digital Gift Cards for Restaurants: Everything You Need to Know

By Katherine Pendrill

Rearview shot of a woman paying cash in a cafe

Selling gift cards in your restaurant is a smart move for several reasons. They help you generate immediate cash, bring more guests into your restaurant, and boost your revenue since diners often spend more than the value of the gift card when they redeem it. But, while selling gift cards may be a no-brainer, you still need to choose whether to offer physical gift cards, digital gift cards, or both.

In this guide to restaurant gift cards, we’ll cover:

  • An intro to restaurant gift cards
  • The difference between physical vs. digital gift cards
  • The pros and cons of physical vs. digital gift cards
  • An overview of TouchBistro Gift Cards

What are Restaurant Gift Cards?

A restaurant gift card is a physical or digital card that a customer purchases from you with a certain amount of money pre-loaded onto it (for example, $50 or $100). The traditional intent behind this product is that a customer will give it to someone else to use at your restaurant.

Offering gift cards is a key part of knowing how to increase restaurant sales because gift cards can help you acquire new customers and encourage repeat business from existing customers.

According to Fiserv’s Q1 2022 Gift Card Gauge survey, 80% of American consumers planned to purchase gift cards in 2022, and 46% consider gift cards their “go-to alternative to tangible gifts.”

The benefits and popularity of gift cards are clear. Next, we’ll dive into the differences between physical vs. digital gift cards.

A shot of a business person using his contactless card for a payment in a coffeeshop.

Physical Gift Cards for Restaurants

A physical gift card looks and feels like a debit or credit card, and in order to use it, guests need to present the card when it’s time to pay for their meal. 

While these types of gift cards appeal to many diners and are still quite common, physical cards have fallen out of favor with some consumers in the digital age. Let’s break down the pros and cons of physical cards.

Benefits of Physical Gift Cards

1. Excellent Branding Opportunity

Distributing physical gift cards that are branded with your logo and colors helps build awareness of your restaurant, and keeps your venue top of mind every time the recipient opens their wallet and sees the card. 

With modern-day gift card solutions like TouchBistro Gift Cards, you can easily create and sell physical cards for single locations or multiple venues. You can even choose from templates or include your own customized designs. 

2. Many Diners Prefer Them

According to 2021 data from Fiserv, 54% of consumers still prefer physical gift cards. These findings are in line with a 2019 study that reported both purchasers and receivers prefer physical vs. digital gift cards.

The survey ultimately found that more than 60% of people who prefer physical gift cards cite the fact that they’re a “tangible gift,” while 46% say they opt for the cards so the recipient “has something to unwrap.”

3. Easy to Sell, Give, and Use

As a restaurateur, physical cards can be easier to sell than digital restaurant gift cards because they’re often on display at your venue, for example at the host stand or the bar. This means your guests will be more likely to see – and think about buying – a card.

Physical gift cards are also easy to give, for instance as a stocking stuffer or inside the envelope with a holiday or birthday card. They’re also easy to use, which is especially beneficial for people who aren’t as comfortable with technology.

Drawbacks of Physical Gift Cards

1. They Can be Lost

Seinfeld fans will recall George Costanza’s bulky wallet – and while it’s good for a laugh, it can be a poor place to keep a gift card. Unless the recipient of a gift card is a fairly organized person, there’s always a risk that the card will get lost or forgotten.

2. Purchasing Can be Inconvenient

To purchase a physical gift card, customers have to visit your restaurant in person, which isn’t always convenient. This can be unappealing for people who prefer instant gratification and the ability to immediately deliver a gift card to their chosen recipient, or those who simply don’t have time to visit your venue.

3. They Generate Waste

Most physical gift cards can be re-loaded with money by the recipient. However, if the customer decides to stop using the card rather than reloading it, this will generate some plastic waste.

4. No Ability to Personalize

Physical gift cards can be branded, but not personalized (beyond writing the recipient’s name on the card in permanent marker).

Portrait of beautiful young woman using smartphone while enjoying evening on outdoor terrace in cafe or coffee shop, copy space

Digital Gift Cards for Restaurants

Digital restaurant gift cards are electronic cards that customers can purchase online and email to their chosen recipient, who can then use their smartphone to redeem the card.

Online restaurant gift cards are increasing in popularity for multiple reasons, which we’ll dig into shortly. And, a 2022 study by Patryonix reported that consumers actually spend more on digital cards than they do on physical ones. However, digital cards do have some downsides. Let’s walk through the advantages and disadvantages.

Benefits of Digital Gift Cards

1. Contactless Gift

Since the COVID-19 pandemic, many people are looking for contactless solutions. This makes an online gift card the perfect option for both the purchaser and the recipient, since there is nothing associated with the gift that either party has to physically touch. 

Even more good news? The pandemic has sped up the transition toward new payment technology, which means more people than ever are now familiar with contactless payment methods.

2. Easy to Buy, Send, and Redeem

Fans of instant gratification will love digital gift cards because they’re easy to purchase and send, with immediate delivery to the recipient at the click of a button. Not to mention, your guests can pre-schedule gift cards to be delivered at a certain time and date, allowing them to plan in advance.

They’re also easy for diners to redeem at your restaurant or when they order online. For example, with TouchBistro Digital Gift Cards, guests can redeem their card from TouchBistro’s Customer Web App in venue or via TouchBistro Online Ordering when they’re at home. 

3. Opportunities for Personalization

Today’s consumers love personalization. In fact, 90% of American consumers consider personalization appealing, according to 2022 research from Statista.

Fortunately, many digital gift card solutions allow your customers to personalize their gift for the occasion or holiday, giving you an opportunity to amp up your restaurant holiday gift card promotions. This means you can help your customers spread personalized cheer on birthdays, Mother’s Day, and more!

4. Lower Cost and Less Waste

Online gift cards are a less expensive option for restaurants than physical cards since no plastic card has to be produced in order to use them. 

For the same reason, there’s also no plastic waste associated with digital cards, making them an eco-friendly option for your restaurant.

Drawbacks of Digital Gift Cards

1. No Tangible Item to Exchange

Even though a physical gift card is small enough to fit inside an envelope, it’s still a tangible item that your customers can physically give to another person. In contrast, some consumers feel that online restaurant gift cards are a bit impersonal.

2. May be Harder to Sell In-Venue

As the saying goes, “out of sight, out of mind.” Digital gift cards can be more difficult to sell at your restaurant since customers won’t see the card front and center, the way they would see a stack of physical gift cards on your host stand. (Tip: One way to get around this is to add a sign advertising your gift cards at the point of purchase, or to market your digital cards in your restaurant newsletter and other customer communications).

TouchBistro Gift Cards

Now that you’ve got the lowdown on both physical and digital restaurant gift cards, it’s time to find the right solution for your business.

With TouchBistro Gift Cards, you can drive immediate cash flow and repeat business with customizable physical and digital gift cards for your restaurant. That’s right – you don’t have to choose just one option!

Not only do TouchBistro Gift Cards offer all the gift card benefits we walked through earlier, they also integrate with the TouchBistro POS, unlocking powerful reporting capabilities.

Leveraging gift cards at your restaurant is an excellent way to increase sales and deliver a great guest experience. And, if you can offer both physical and digital gift cards, you and your customers will get to enjoy the best of both worlds. Happy selling!

Photo of Katherine Pendrill
by Katherine Pendrill

Katherine is the Content Marketing Manager at TouchBistro, where she writes about trending topics in food and restaurants. The opposite of a picky eater, she’ll try (almost) anything at least once. Whether it’s chowing down on camel burgers in Morocco or snacking on octopus dumplings in Japan, she’s always up for new food experiences.

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