After watching the rest of the retail world get fat on the popularity of reloadable gift cards, the restaurant industry is jumping into the fray just in time for the holidays.
Everyone from McDonald’s to Dunkin’ Donuts to Jack in the Box has added, or soon plans to add, “stored value” cards you can reload with more bucks.
“It’s become the greens fee for being a serious player in the restaurant business,” says John Glass, analyst at CIBC World Markets.
And why not? Gift card sales at all retailers are expected to top $17.3 billion this year, reports the National Retail Federation. Gift cards will be the top holiday gift this year – even surpassing apparel, reports Deloitte & Touche.
Restaurants were slow to nibble. But the success of the Starbucks Card – it accounted for 11% of Starbucks’ North American revenue in fiscal 2004 – changed everything.
In a new, likely to be lucrative holiday twist, Starbucks started a program that lets parents reload kids’ Starbucks cards monthly, tied to a bank card.
With Starbucks as a major driver, restaurant gift card sales nationally jumped 30% from 2002 to 2004, says Tara Weiner, national managing partner of consumer industries at Deloitte & Touche.