Gift cards can help restaurants attract new customers during the holidays, but successful promotions depend on more than sales. A 2026 TSG and Bank of America study found that 55% of US consumers would try a new business because of a gift card, up from 49% two years earlier.
The findings point to an opportunity for restaurants, though the survey covers gift card behavior across industries rather than restaurant transactions specifically. To make the most of holiday demand, operators need to prepare their sales channels, test redemption systems, and protect customers against fraud.
Use gift cards to attract new guests and larger orders
Gift cards can introduce restaurants to new customers, particularly younger consumers. The TSG and Bank of America survey found that 64% of Millennials and 61% of Gen Z respondents would try a new business because of a gift card, compared with 37% of Baby Boomers.
Restaurants can test targeted email and social campaigns, promote gift cards at checkout, and offer digital purchases through their websites. For seasonal promotions, start with the channels that already generate sales rather than launching new ones without a way to measure results.
Gift cards may also encourage additional spending. In the survey, 44% of consumers said they typically spend more than the card's value. Operators can track average redemption checks and spending beyond the gift card balance to determine whether this translates into incremental revenue.
Corporate gifting offers another opportunity. While 81% of surveyed consumers said they would like to receive gift cards from an employer, only 41% reported receiving one. Restaurants can test bulk gift card packages for nearby offices, corporate clients, and repeat business customers.
For broader seasonal planning, see our guide to Black Friday gift cards and holiday catering, which covers promotional timing, pricing, and capacity.
Offer convenient purchasing and redemption options
Guests should be able to purchase and redeem gift cards without unnecessary complications. The TSG study found that 39% to 49% of consumers were less likely to use a gift card when a preferred redemption channel was unavailable.
Physical cards remain relevant, with 36% of respondents reporting physical-only purchases in 2025. Restaurants should consider offering both physical and digital cards where their systems support them.
Before launching promotions:
- Test purchasing and delivery. Confirm digital gift cards arrive correctly and physical cards activate at checkout.
- Verify redemption channels. Test each supported option, including in-person purchases and direct online ordering.
- Clarify restrictions. Tell customers where cards can be redeemed, particularly if third-party delivery platforms do not accept them.
- Check balances. Make sure guests can access their remaining gift card value.
If the current platform cannot support essential functions, compare the gift card capabilities of different restaurant POS systems before investing in additional promotions.
Test gift card redemption before the holiday rush
A gift card that sells successfully but fails during redemption can create frustrated customers and extra work for staff.
Before promotions begin, run test transactions covering:
- Partial redemption: Confirm remaining balances stay available when guests spend less than the card's value.
- Split tender: Verify that customers can pay part of a check with a gift card and the remainder using another payment method.
- Refunds and voids: Check how the system restores balances when transactions are canceled or refunded.
- Multi-location acceptance: Confirm whether cards purchased at one location work at other participating locations.
- Online redemption: Test gift cards through the actual ordering platform customers use.
Capabilities vary by provider, so confirm supported functions and limitations before advertising them.
Managers should also know which reports track gift card activations, redemptions, and outstanding balances. Review the available data regularly for activation failures, balance discrepancies, and unusual redemption activity.
Our guide to restaurant POS features and benefits explains how payment processing and reporting tools support day-to-day restaurant operations.
Train staff to handle gift card problems
Holiday gift card promotions can create more balance inquiries, activation issues, and redemption questions during busy service periods.
Before the rush, show employees how to check balances, verify activations, and escalate disputes to a manager. Keep transaction records accessible so staff can investigate missing balances or failed activations without delaying service.
Employees should also recognize common gift card scams. The Federal Trade Commission (FTC) warns that scammers may pressure people into purchasing gift cards and sharing the numbers or PINs to settle fake debts, pay fees, or respond to emergencies.
If staff notice a customer being pressured into this type of transaction, they can encourage the customer to stop and verify the request before purchasing.
Protect physical gift cards from tampering
Physical gift cards introduce another security concern: criminals can steal card numbers and PINs before customers purchase them, then drain the balances after activation.
In a December 2024 consumer alert, the FTC warned that scammers sometimes remove protective stickers or scratch off security coverings on cards displayed in stores.
Restaurants can reduce exposure by keeping unactivated cards behind the counter or in secured displays. Employees should inspect inventory for missing stickers, exposed PINs, or other signs of tampering during restocking.
If a suspicious card is found, remove potentially affected inventory from sale and contact the gift card provider for instructions. The FTC notes that scammers may tamper with multiple cards in the same display.
Review promotional terms and gift card profitability
Before launching a gift card promotion, confirm that its terms comply with applicable federal and state requirements.
Under federal gift card regulations, funds on most covered purchased gift cards generally cannot expire for at least five years. Restrictions also apply to inactivity fees. Promotional and loyalty cards may be treated differently, and state laws can impose additional requirements.
Restaurants offering bonus cards, such as a free $10 promotional card with a $50 purchase, should clearly disclose redemption dates, restrictions, and other applicable terms.
Operators should also distinguish upfront gift card sales from revenue earned when cards are redeemed. Selling a gift card brings in cash, but it generally creates an obligation to provide future goods or services.
To evaluate a promotion's actual performance, track:
- Gift cards sold and total value loaded
- Redemption rates and outstanding balances
- Average check and spending above card value
- Promotional bonus value redeemed
- Food, labor, and other costs associated with redeemed orders
The goal is to determine whether gift card promotions generate profitable additional business, not simply higher holiday sales totals.
Last bite
Before the first promotion goes live, confirm that gift cards work across all advertised purchasing and redemption channels, staff understand dispute procedures, and physical inventory is secure.
Review promotional terms and reporting capabilities with the gift card provider. Once sales begin, monitor redemption activity, spending above card value, and customer complaints.
Holiday gift cards can introduce new guests and encourage return visits. Their long-term value, however, depends on an experience that works just as well when customers redeem them as it did when they purchased them.
