Facing massive losses in foot traffic and sales, restaurateurs across the country turned to gift cards as an emergency stopgap measure. Now, they are quickly discovering the limitations of that strategy.
for purchasing tens — or hundreds — of thousands of dollars in restaurant gift cards and distributing them to their employees. But as some cities even gear up to reopen in the coming weeks, Assil and others in her position are quickly discovering the limitations of the gift card strategy.
After Illinois instituted a shelter-in-place order, Taylor closed up shop for two weeks despite her bakery being considered an essential business. The goal was to reevaluate how to stay open in the long run, she says, and she initially encouraged customers to purchase gift cards to help keep the business afloat. “I didn’t know how long I was going to be closed. The way I explained it to people was that the gift cards were going to be helpful — they were an immediate Band-Aid,” she says.
People who want to support their favorite restaurants by buying gift cards may be out of luck if the business ends up closing for good, and restaurant owners may not want to take the risk of angering their former customers by selling gift cards they don’t know they’ll be able to fulfill given the circumstances. A 2010imposed limits on gift card fees and expiration dates, but customers have little recourse if the restaurant or business that issues their gift card shuts down altogether.
Assil, too, has come up with new ways to keep her restaurants afloat as the pandemic continues. Reem’s has begun selling merch, and the bakery’s Oakland location has fully shifted to a commissary kitchen model, where nonprofit organizations like World Central Kitchen order meals in bulk and distribute them to people in need. Though the commissary kitchen meals are being sold more or less at cost, the partnership is providing enough revenue to keep some people working.
Kapur says Liholiho had high gift card sales even before the pandemic and saw a surge immediately after San Francisco’s shelter-in-place order was announced in mid-March. The restaurant is currently offering customers 25 percent off all gift cards.
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