View Full Version : Restaurants & Discount Gift Certificates
Vox Humana
11th August 2010, 07:49 PM
On restaurant.com you can buy gift certificates at a discount; $25 cert for $10, and I've seen up to $100 for $40. Apparently they'll also regularly run specials for 1/2 off certificates, so if you watch for it you can get $25 certs for $5.
I know the restaurants use these as promotions to get people in the door in the hopes that they'll return another time and pay regular prices.
Then you have the hard-core bargain shoppers who probably never eat out without a restaurant.com gift certificate in hand. And they probably have no compunction against visiting the same restaurant and using restaurant.com gift certificates on a regular basis (I'm not talking about using the same one, but buying a new one each time.)
My question is: how do the restaurants feel about these bargain hunter regulars? Do they hate them (but what can you do?), are they happy to have people coming in the door (making a little money's better than none at all), or do they not care much either way?
Can anyone with experience in these matters weigh in?
VH
The Central Scrutinizer
11th August 2010, 09:14 PM
How would they know?
drkitten
12th August 2010, 01:09 AM
On restaurant.com you can buy gift certificates at a discount; $25 cert for $10, and I've seen up to $100 for $40. Apparently they'll also regularly run specials for 1/2 off certificates, so if you watch for it you can get $25 certs for $5.
I know the restaurants use these as promotions to get people in the door in the hopes that they'll return another time and pay regular prices.
Then you have the hard-core bargain shoppers who probably never eat out without a restaurant.com gift certificate in hand. And they probably have no compunction against visiting the same restaurant and using restaurant.com gift certificates on a regular basis (I'm not talking about using the same one, but buying a new one each time.)
My question is: how do the restaurants feel about these bargain hunter regulars? Do they hate them (but what can you do?), are they happy to have people coming in the door (making a little money's better than none at all), or do they not care much either way?
Generally, happy to have them come in.
The restaurant normally gets the full $10 (or whatever it is) for the certificate -- well, okay, $10 less restaurant.com's cut -- regardless of the price the web site sells them at. It picked a price it can live with, or it wouldn't have cut the deal in the first place. So when the web site offers them at a discounted discount, that extra money comes out of the web site's pocket, not the restaurant.
Restaurant.com could give the things away for free and the restaurant wouldn't care.
bluesjnr
12th August 2010, 03:41 AM
On the other hand here is my story. A good few years ago a thing called a "Spree Book" was popular in Scotland. The concept was good, in the book you had a number of discount coupons for restaurants, clothing stores, services etc. The total savings that could be made were in the region of hundreds of pounds, even if you used only some of the coupons.
Long story short, I bought a book and then booked a table at a good, local Indian restaurant who had advertised in the book and offered a discount coupon. Whilst booking, I informed them that I was intending to use my discount coupon: at that I was told that they would not be honouring this.
The reason they gave was that they had a prior agreement with the agents that they would only print and sell a given number of the books and that the agent had gone against the agreement and sold considerably more. They (according to the person I spoke to) had had over two hundred people in over the last few days all using the coupon and were now losing money on the deal.
I made the booking anyway and could not be bothered to check the veracity of his statement.
Vox Humana
12th August 2010, 05:09 AM
How would they know?
My question wasn't as clear as it should have been. My assumption is that if you show up regularly at the same restaurant with a discounted gift certificate they'd start to recognize you - especially if it's a smaller, less busy place. And those are the places that are (understandably) offering the discounted certificates.
blutoski
12th August 2010, 10:23 AM
It's hard to answer without knowing the merchant's relationship to the website, or the merchant's unit profitability (or loss) per coupon. My impression is that these coupon websites may be largely experimental with marketing right now.
Coupons are a normal part of acquiring new business, so normal use is not resented.
There is no contract with a coupon - it's an offer to treat. If the restaurant determines they're actually losing money on a customer, they can refuse service or refuse to honour his coupon.
I suspect that any customer who will only do business at a price that is a loss to the merchant will be swiftly downgraded from 'customer' to 'noncustomer'.
In some competitive industries, these customers can be flagged and they may find it hard to get a new supplier.
RobRoy
12th August 2010, 10:29 AM
Don't restaurants have a huge mark-up on their prices already ($2.50 for a glass of milk on a gallon that costs $3.50)? It seems that even on a $25 gift certificate for $10, they still stand to make money on whatever you order. If you like a gin and tonic with you meal, they’re that much further up, and anything over the $25 certificate goes back to profit.
Getting someone in the door, and to that particular restaurant is 90% of the battle.
MikeMangum
12th August 2010, 12:23 PM
Don't restaurants have a huge mark-up on their prices already ($2.50 for a glass of milk on a gallon that costs $3.50)? It seems that even on a $25 gift certificate for $10, they still stand to make money on whatever you order. If you like a gin and tonic with you meal, they’re that much further up, and anything over the $25 certificate goes back to profit.
Getting someone in the door, and to that particular restaurant is 90% of the battle.
Food makes up a tiny portion of the actual cost to a restaurant. Factor labor and rent into that $2.50 glass of milk and suddenly it makes sense.
RobRoy
12th August 2010, 12:25 PM
Food makes up a tiny portion of the actual cost to a restaurant. Factor labor and rent into that $2.50 glass of milk and suddenly it makes sense.
I didn't say it was outrageous, I just stated that food has a large mark-up at restaurants. Labor and rent doesn't really account for it. I certainly don't begrudge them. I'm happy to have someone pour my milk for me.
Scootch
12th August 2010, 02:22 PM
I owned a restuarant and most (if not all) my gift certifcates were purchased as holiday gifts. I thought they were great! At the time I called it pre-paid money because I was getting paid now with very little cost. And if the certificates weren't redeemed that was just free money.
But I never had a problem with people coming in with redeeming gift certificates. It was an opportunity to get a new customer (and if they came in with a group all the better)
RobRoy
12th August 2010, 02:56 PM
I owned a restuarant and most (if not all) my gift certifcates were purchased as holiday gifts. I thought they were great! At the time I called it pre-paid money because I was getting paid now with very little cost. And if the certificates weren't redeemed that was just free money.
But I never had a problem with people coming in with redeeming gift certificates. It was an opportunity to get a new customer (and if they came in with a group all the better)
I’d totally forgotten about this! This happens all the time with gift cards for almost any industry. My accounting professor also told us that it happens with everything prepaid, up to and including postage stamps. Every year, postage stamps are damaged, lost, misused, or just forgotten and that’s free money for the issuing agency. Hasn’t help the USPS, but there is it.
Lisa Simpson
12th August 2010, 03:02 PM
At Costco you can buy discounted gift cards, usually $10 off of every $50. So a $50 gift card sells for $40. But when you go to the restaurant, all they see is a $50 gift card. The exception at Costco is iTunes. They only give $1 off per $15 dollars purchased.
theprestige
12th August 2010, 05:35 PM
I didn't say it was outrageous, I just stated that food has a large mark-up at restaurants. Labor and rent doesn't really account for it.
Evidence?
drkitten
13th August 2010, 01:55 AM
Evidence?
This site (allexperts.com) (http://en.allexperts.com/q/Running-Restaurant-2285/Ideal-restaurant-costs.htm) suggests the cost breakdown for a typical restaurant as follows:
Food 25%
Total labor 20%
Management 10%
Rent 10%
Supplies 8 %
Maintenance 5%
Marketing 5%
insurance/legal 5%
waste managegement/pest control 2%
utilities 6%
Forbes magazine suggests costs in the same ballpark:
As for ongoing expenses, the cost of goods sold (food) will be the main course: 25% to 40% of revenues, depending on the restaurant concept, says Peter Ryan at Restaurant Solutions in Myrtle Beach, S.C. (Pizza joints will be on the low end, steak houses on the high end.) Payroll will gobble an additional 20% to 25%; rent should eat 8%. After marketing, payroll and taxes, if you end up clocking 5% profit margins, pat yourself on the back.
Last of the Fraggles
13th August 2010, 02:14 AM
Will depend on the specific situation of the restaurant and the share of bargain hunters in the overall.
If 5% of the customers are just breaking even or making a small loss then its not a big deal. If 75% of your customers are on these deals then your business won't last long.
If any company is operating on a high percentage of these coupons then either they are soon going out of business or the true value of what they are offering is the lower price and they are just milking the schmucks who pay full rate.
drkitten
13th August 2010, 03:07 AM
Will depend on the specific situation of the restaurant and the share of bargain hunters in the overall.
But remember that the restaurants self-select to be included in these promotions.
If drkitten's House of Mice is a high-volume, low margin operation, I don't need to increase the number of customers, and I can't afford to cut prices -- so I won't participate in the book.
But the other restaurant I run, down the block -- drkitten's Very Upscale Wühlmausenhaus -- is a high-class, high-margin restaurant that is usually only half full. So I might put a coupon for VUW in the book....
Last of the Fraggles
13th August 2010, 03:25 AM
But remember that the restaurants self-select to be included in these promotions.
If drkitten's House of Mice is a high-volume, low margin operation, I don't need to increase the number of customers, and I can't afford to cut prices -- so I won't participate in the book.
But the other restaurant I run, down the block -- drkitten's Very Upscale Wühlmausenhaus -- is a high-class, high-margin restaurant that is usually only half full. So I might put a coupon for VUW in the book....
True, but often times struggling restaurants will use these kinds of promotions to get numbers through the door but they don't make any money on them. They then get in a situation where the only people coming are the bargain hunters and they are too afraid to discontinue the discounts in case they lose all their customers.
On the other hand I see these kinds of things for pizza chains all the time, those guys must still make decent money even at half price.
I would think if you are operating a high margin high class restaurant the last you'd want to do is start giving away coupons to fill seats. After a while people are going to twig that other people are getting their $200 dinner for $100 bucks.
Just thinking
13th August 2010, 04:40 AM
A lot of these certificates --- at least the ones I've seen by me --- have significant restrictions. It may include the day of the week (or time of day) on which it's valid, the minimum amount of $$$$ spent, a second meal for 50% off when purchased with at least one other meal of at least equal value, apply to the entrée only or simply a maximum amount of discount dollars. One time at a restaurant, I patiently waited for a table only to find out when giving the certificate to the waiter that due to the hour of the day, it was no longer valid. When I explained that I in fact arrived well ahead of that hour, it didn't matter --- neither to her nor the manager. Nice, eh? Oh, they are no longer in business --- gee, I can only wonder why.
RobRoy
13th August 2010, 09:10 AM
This site (allexperts.com) (http://en.allexperts.com/q/Running-Restaurant-2285/Ideal-restaurant-costs.htm) suggests the cost breakdown for a typical restaurant as follows:
Forbes magazine suggests costs in the same ballpark:
Thank you. Save me the time. So again, not outrageous, but certainly marked-up.
dudalb
13th August 2010, 10:24 AM
Food makes up a tiny portion of the actual cost to a restaurant. Factor labor and rent into that $2.50 glass of milk and suddenly it makes sense.
True. Labor particularly adds to the cost of a meal.
Dirty Little secret: A main reason you pay a lot more for the same basic meal at a fancy or upscale restaurant then Joe's Diner is because they have so many people in the kitchen. It is also why the quality of food at the upscale restaurant is often better.At Joe;s you have maybe two cooks cooking five or six meals at the same time; at the Upscale restaurant you have five or cooks cooking five or six meals. \
Yes, the upscale restuarant does often buy somewhat more costly ingrediants, but it is amazing how often Joe's and that fancy place get basic ingrediants from the same source.
Tippit
13th August 2010, 09:41 PM
On the other hand here is my story. A good few years ago a thing called a "Spree Book" was popular in Scotland. The concept was good, in the book you had a number of discount coupons for restaurants, clothing stores, services etc. The total savings that could be made were in the region of hundreds of pounds, even if you used only some of the coupons.
Long story short, I bought a book and then booked a table at a good, local Indian restaurant who had advertised in the book and offered a discount coupon. Whilst booking, I informed them that I was intending to use my discount coupon: at that I was told that they would not be honouring this.
The reason they gave was that they had a prior agreement with the agents that they would only print and sell a given number of the books and that the agent had gone against the agreement and sold considerably more. They (according to the person I spoke to) had had over two hundred people in over the last few days all using the coupon and were now losing money on the deal.
I made the booking anyway and could not be bothered to check the veracity of his statement.
This is fraud. The Spree book printer was engaged in a form of counterfeiting, in this case what amounts to tickets that represent potential future liabilities.
This reminds me of when I bought a pre-paid oil change from a door-to-door salesman. Not very bright in retrospect, but I paid with check and the documentation was legit. I specifically mentioned that I drove a BMW M3 and that I used an expensive full synthetic oil in it, and asked whether or not that would be a problem, and of course he said it wouldn't. When I went to redeem the coupon for the oil change, I was told it didn't cover the oil that I needed. The time and effort to protest this wasn't worth it, and so I just ate the loss. I guess the moral of the story is, coupons can be nice, just don't ever buy them.
theprestige
14th August 2010, 03:54 AM
This site (allexperts.com) (http://en.allexperts.com/q/Running-Restaurant-2285/Ideal-restaurant-costs.htm) suggests the cost breakdown for a typical restaurant as follows:
Forbes magazine suggests costs in the same ballpark:
Thank you. Save me the time. So again, not outrageous, but certainly marked-up.
Well, yes. Of course it's marked-up. That's where profit comes from.
What I'm still trying to figure out is how you get from dk's citations of restaurant cost breakdowns to your original claim that "food has a large mark-up in restaurants".
Wikipedia defines "markup" as "the difference between the cost of a good or service and its selling price." That's essentially what I understood you to mean by the term. Please let me know if you meant something different.
dk's cites suggest that a 5% profit margin is good for a restaurant. Did you mean to say that food (plus all the other stuff that goes into delivering that food to you) has a mark-up of about 5%, and that you believe this is "large"?
Or did you mean that you weren't aware of all the other costs involved, to explain how a glass of restaurant milk could sell for such a high price and the restaurant still only gets a 5% profit margin overall?
ETA: I mean, to me, food in restaurants doesn't have a very large mark-up at all, and the reason food in restaurants is expensive is because operating a restaurant is costly.
ingoa
14th August 2010, 05:16 AM
When my parents operated a restaurant they earned their money from selling drinks (beer, wine, sodas). The food was almost cost neutral. But this was in Germany where people tend to stay in the restaurant longer and have more drinks than in the US.
I assume that the markup on food is higher in the US, given the fact that one is almost chased out of the restaurant after one had hist last bite. In France for example a table is seated once (maximum twice) during an evening. One typically starts at 8 pm and leaves at midnight.
Discount certificates exist here, but are rare.
Tippit
14th August 2010, 05:32 AM
Well, yes. Of course it's marked-up. That's where profit comes from.
What I'm still trying to figure out is how you get from dk's citations of restaurant cost breakdowns to your original claim that "food has a large mark-up in restaurants".
Wikipedia defines "markup" as "the difference between the cost of a good or service and its selling price." That's essentially what I understood you to mean by the term. Please let me know if you meant something different.
Using this definition of "markup", restaurant food does indeed have a relatively large markup. All of the other assorted costs of operating a restaurant are independent of the actual food cost; the difference between this and the selling price as a percent of the cost represents the markup.
dk's cites suggest that a 5% profit margin is good for a restaurant. Did you mean to say that food (plus all the other stuff that goes into delivering that food to you) has a mark-up of about 5%, and that you believe this is "large"?
Or did you mean that you weren't aware of all the other costs involved, to explain how a glass of restaurant milk could sell for such a high price and the restaurant still only gets a 5% profit margin overall?
I think he meant to say neither. Markup has a very specific definition which, in this context, is not inconsistent with the relatively low net margins in the restaurant business. The markups are high specifically because of the labor intensive nature of the business and the other associated costs. I doubt the use of this term was to imply that the restaurant business is somehow exploitative, which seems to be what you are inferring from what was said.
ETA: I mean, to me, food in restaurants doesn't have a very large mark-up at all, and the reason food in restaurants is expensive is because operating a restaurant is costly.
In actuality, it does have a high markup, specifically because of the multitude of other expenses involved in the operation of a restaurant. In spite of this, it generally remains a pretty lousy business.
nimzov
14th August 2010, 05:45 AM
Coupons are a normal part of acquiring new business, so normal use is not resented.
There is no contract with a coupon - it's an offer to treat.
If I receive from a restaurant an offer for a meal at a certain price, is this not a contract ? :confused:
SatanicSheep
14th August 2010, 06:45 AM
I think buisnesses love these "stored value" devices because the chances that every coupon sold will be redeemed is slim and probally takes away some of the sting when someone gets a deal.
RobRoy
16th August 2010, 10:23 AM
Well, yes. Of course it's marked-up. That's where profit comes from.
What I'm still trying to figure out is how you get from dk's citations of restaurant cost breakdowns to your original claim that "food has a large mark-up in restaurants".
Wikipedia defines "markup" as "the difference between the cost of a good or service and its selling price." That's essentially what I understood you to mean by the term. Please let me know if you meant something different.
dk's cites suggest that a 5% profit margin is good for a restaurant. Did you mean to say that food (plus all the other stuff that goes into delivering that food to you) has a mark-up of about 5%, and that you believe this is "large"?
Or did you mean that you weren't aware of all the other costs involved, to explain how a glass of restaurant milk could sell for such a high price and the restaurant still only gets a 5% profit margin overall?
ETA: I mean, to me, food in restaurants doesn't have a very large mark-up at all, and the reason food in restaurants is expensive is because operating a restaurant is costly.
Using this definition of "markup", restaurant food does indeed have a relatively large markup. All of the other assorted costs of operating a restaurant are independent of the actual food cost; the difference between this and the selling price as a percent of the cost represents the markup.
This.
I think he meant to say neither. Markup has a very specific definition which, in this context, is not inconsistent with the relatively low net margins in the restaurant business. The markups are high specifically because of the labor intensive nature of the business and the other associated costs. I doubt the use of this term was to imply that the restaurant business is somehow exploitative, which seems to be what you are inferring from what was said.
And this.
In actuality, it does have a high markup, specifically because of the multitude of other expenses involved in the operation of a restaurant. In spite of this, it generally remains a pretty lousy business.
And this too. :D
So again, this is how restaurants stand to make money, or just not lose money, when they offer these discounted certificates. Some of it is a light gamble, in that they're hoping you spend more than your certificate is worth, especially on the more highly marked-up goods, like drinks, especially alcoholic beverages.
drkitten
16th August 2010, 10:34 AM
If I receive from a restaurant an offer for a meal at a certain price, is this not a contract ? :confused:
No, it's not. The amount of case law on this is tremendous.
nimzov
16th August 2010, 11:57 AM
No, it's not. The amount of case law on this is tremendous.
Care to give at least one so I can find out what the arguments are ?
blutoski
17th August 2010, 10:04 PM
If I receive from a restaurant an offer for a meal at a certain price, is this not a contract ? :confused:
No - it's considered an "invitation to treat."
It is an expression of the sender's interest in negotiating with the recipient, but the recipient's response is not itself a contract.
Examples in Wikipedia: [invitation to treat (http://en.wikipedia.org/wiki/Invitation_to_treat)]
blutoski
17th August 2010, 10:25 PM
Don't restaurants have a huge mark-up on their prices already ($2.50 for a glass of milk on a gallon that costs $3.50)? It seems that even on a $25 gift certificate for $10, they still stand to make money on whatever you order. If you like a gin and tonic with you meal, they’re that much further up, and anything over the $25 certificate goes back to profit.
Getting someone in the door, and to that particular restaurant is 90% of the battle.
Markup depends on product. Some products are loss-leaders for others, and are sold at unit cost.
Overall, restaurants have razor-thin profits, which is why they're a risky business.
blutoski
17th August 2010, 10:30 PM
So again, this is how restaurants stand to make money, or just not lose money, when they offer these discounted certificates. Some of it is a light gamble, in that they're hoping you spend more than your certificate is worth, especially on the more highly marked-up goods, like drinks, especially alcoholic beverages.
Sometimes the coupons are expected to even lose money, as an investment in the customer base. Particularly common for a new business to offer free or at-a-loss product during the first year to attract new customers. Part of the startup costs, along with buying advertising and training staff. Possibly also the purchase of equipment that can't be leased or financed.
Established businesses may respond to reduce customer defection rate, although that is rarer.
blutoski
17th August 2010, 10:39 PM
Using this definition of "markup", restaurant food does indeed have a relatively large markup. All of the other assorted costs of operating a restaurant are independent of the actual food cost; the difference between this and the selling price as a percent of the cost represents the markup.
The definition is too vague - there's no reason 'cost' can't include capital amortization, lease, and average labour. Many classes of service industry have no material costs to the service sold since no physical object changes hands, but that's not an infinite markup.
For example, the cost of servicing a phone inquiry is about $20, based on the sunken capital of the call centre, operating cost of the call centre, and specific labour associated with the call category (technical support calls are cheaper than billing inquiries or sales calls).
nimzov
18th August 2010, 06:07 AM
No - it's considered an "invitation to treat."
It is an expression of the sender's interest in negotiating with the recipient, but the recipient's response is not itself a contract.
Examples in Wikipedia: [invitation to treat (http://en.wikipedia.org/wiki/Invitation_to_treat)]
Thanks. Exactly the information I was looking for. I did not know this expression.
drkitten
18th August 2010, 09:09 AM
The definition is too vague - there's no reason 'cost' can't include capital amortization, lease, and average labour. Many classes of service industry have no material costs to the service sold since no physical object changes hands, but that's not an infinite markup.
Actually, as far as I can tell, that is an infinite markup.
That's why "markup" is a different concept than "profit margin." And why bean counters use different words to describe them.
roger
18th August 2010, 09:13 AM
When my parents operated a restaurant they earned their money from selling drinks (beer, wine, sodas). The food was almost cost neutral. But this was in Germany where people tend to stay in the restaurant longer and have more drinks than in the US.
I assume that the markup on food is higher in the US, given the fact that one is almost chased out of the restaurant after one had hist last bite. In France for example a table is seated once (maximum twice) during an evening. One typically starts at 8 pm and leaves at midnight.
Discount certificates exist here, but are rare.I hope I'm not diverting the thread, but I've always found this interesting.
For the most part I don't enjoy restaurants. When I'm in one I generally want to be in and out as fast as possible. There are so many things to do in life except sit at a table. Yes, sometimes you have captivating table companions, or the food is so extraordinary all you want to do is sink into your chair and savor every bite, but more often it's just an in-and-out thing for me.
So, if a normal seating is 4 hours in Paris, how often do people go to restaurants? Are we talking a once a month special event, or the sort of thing you do 3 nights a week? I personally can't imagine burning, say, 8-12 hours to dinner per week.
ingoa
20th August 2010, 02:26 AM
I hope I'm not diverting the thread, but I've always found this interesting.
...
So, if a normal seating is 4 hours in Paris, how often do people go to restaurants? Are we talking a once a month special event, or the sort of thing you do 3 nights a week? I personally can't imagine burning, say, 8-12 hours to dinner per week.
I go about 4 times a month into a restaurant. Which is probably a little bit more than average.
blutoski
4th October 2010, 09:23 PM
Relevant article:
[How Groupon Clobbered One Business (http://www.businessinsider.com/how-a-successful-groupon-clobbered-one-business-2010-9)]
referring to: [Groupon in Retrospect (http://posiescafe.com/wp/?p=316)]
Rocko
12th October 2010, 06:19 PM
There is no contract with a coupon - it's an offer to treat. If the restaurant determines they're actually losing money on a customer, they can refuse service or refuse to honour his coupon.
But if you've purchased the coupon, there must be a contract with someone. At which point we're presumably into the Ts&Cs of the coupon sale. And who actually issued it, obviously.
But any third party coupon issuer with an ounce of brains is going to make sure the restaurant in question can't back out, because their doing so would leave the issuer in a breach they have no control over.
blutoski
15th October 2010, 05:00 PM
But if you've purchased the coupon, there must be a contract with someone. At which point we're presumably into the Ts&Cs of the coupon sale. And who actually issued it, obviously.
Basically.
But any third party coupon issuer with an ounce of brains is going to make sure the restaurant in question can't back out, because their doing so would leave the issuer in a breach they have no control over.
Meh. It happens in other industries. Welcome to the stressball that is the life of a reseller.
My corner store sells skytrain tickets, but if the skytrain breaks down I can't go after them for a refund. Well, I can try, but they're not interested in taking a hit for somebody else's failure.
blutoski
15th October 2010, 05:07 PM
But if you've purchased the coupon, there must be a contract with someone. At which point we're presumably into the Ts&Cs of the coupon sale. And who actually issued it, obviously.
But any third party coupon issuer with an ounce of brains is going to make sure the restaurant in question can't back out, because their doing so would leave the issuer in a breach they have no control over.
I may have been hasty with my previous post.
These do seem to operate more like gift certificates rather than coupons.
What's at stake is that gift certificates are not very liquid... it's not like refusing cash business where customers are able to walk away and substitute with another vendor.
Selling gift certificates and reserving the right to refuse service does sound like bad faith.
fuelair
15th October 2010, 05:39 PM
On restaurant.com you can buy gift certificates at a discount; $25 cert for $10, and I've seen up to $100 for $40. Apparently they'll also regularly run specials for 1/2 off certificates, so if you watch for it you can get $25 certs for $5.
I know the restaurants use these as promotions to get people in the door in the hopes that they'll return another time and pay regular prices.
Then you have the hard-core bargain shoppers who probably never eat out without a restaurant.com gift certificate in hand. And they probably have no compunction against visiting the same restaurant and using restaurant.com gift certificates on a regular basis (I'm not talking about using the same one, but buying a new one each time.)
My question is: how do the restaurants feel about these bargain hunter regulars? Do they hate them (but what can you do?), are they happy to have people coming in the door (making a little money's better than none at all), or do they not care much either way?
Can anyone with experience in these matters weigh in?
VHIf these are the one's I have seen, they normally have a minmum purchase feature that make the deal much less good than it sounds up front. And, better for the restauant than it first appears also (ie. You can't just get a 25.00 meal with the $10 certificate - you have to have a $40-$50 dinner before the ticket applies. At least that's how the ones I've checked out in Orlando work - calculating out, you seem to get a 15-20% discount on the total ordered (as long as it is the minimum required) and the discount drops the further you go above the minimum you must order.
MatildaGage
15th October 2010, 05:50 PM
I think if the restaurants choose to participate, they are expecting people to utilize what they offer.
I've had lots of trouble with restaurant.com, incidentally. Several times the restaurants were closed at the times they advertised being open, for one. And now I'm stuck with 2 gift certs that I can't cash in unless I go to a specific restaurant on a Tuesday night at 4:30 pm with a party of 8. (OK, I'm exaggerating a bit there.;)) I travel a great deal and keep trying to use my cards in other cities....nothing available, or the certs aren't really saving me any money (have to buy way too much food to use the cert).
<---{that's probably why the restaurant owners don't mind}
© 2001-2009, James Randi Educational Foundation. All Rights Reserved.
vBulletin® v3.7.7, Copyright ©2000-2012, Jelsoft Enterprises Ltd.