New Federal Legislation Impacts Expiration Dates and Fees for Gift Cards

Featured in Nation's Restaurant News by Lisa Jennings

Tri-State Area's Premier Digital Dining Provider

New rules involving the sale of pre-paid gift cards and incentive offers, including limitations on expiration dates and dormancy fees, went into effect Sunday as a result of federal legislation adopted earlier this year.

The legislation, which affects gift cards sold or issued on or after Aug. 22, is designed to address concerns raised in recent years by consumers, who are increasingly buying gift cards.

For the first half of 2010, the number of restaurant gift cards sold rose 12.4 percent over the same period last year in the quick-service segment alone, according to a study by Atlanta-based First Data Corp., an electronic commerce and payment processor. At casual-dining restaurants, gift card sales increased 6.1 percent for the first half of the year. The sale of gift cards overall, including those offered by retailers, rose 2.7 percent.

Under the new rules, gift cards must be good for at least five years from the purchase date. Any money later added to the card must also be good for at least five years, said David Koenig, director of tax and profitability for the National Restaurant Association.

In addition, consumers may be able to use the unspent money on a card even after it expires. If the card expires in five years, for example, but the money left on the card doesn’t expire for seven years, consumers can request a replacement card at no cost.

The new rules also place limits on fees for dormancy or inactivity, as well as usage or maintenance fees. Generally, fees can be charged if the card has been inactive for at least 12 months, for example, but a fee can be charged only once per month after that. Restaurants are allowed to charge fees for replacing a lost or stolen card.

Restaurant companies must disclose the card fees and expiration dates clearly on the card or packaging, though Koenig said the rules do not specify how such disclosures must be made.

Rebekka Rea, associate director of the Retail Gift Card Association in Oklahoma City, said the new rules are not likely to have much of an impact on the gift card industry as most retailers and restaurants have long eliminated expiration dates and dormancy fees.

“Our industry has already been self-regulated to be more consumer friendly,” Rea said.

The Retail Gift Card Association, which represents about 33 companies and 60 brands — including major restaurant companies such as Subway, Dunkin' Brands, Darden and Brinker International — asks members to abide by a code that includes limiting fees and eliminating expiration dates, she said.

“The biggest impact for restaurants will be the way gift cards are packaged,” Rea said. “They need to be sure the terms and conditions are clearly visible, and we would recommend that they also be stated on their websites.”

The new rules do not apply to some reloadable pre-paid cards that are not intended or marketed as gifts, said attorney Amy Pierce with Pillsbury Winthrop Shaw Pittman in Sacramento, Calif.

Chain operators have to be careful, however, because if any location markets the card as a gift — even a picture of a bow on the card could be a problem — the entire chain’s cards would lose the exemption and must comply with the new rules, Pierce said.

Also not covered are cards given as a reward or part of a promotion, Koenig said. For example, a $15 gift card given by a restaurant if consumers purchase $100 or more may have fees and an expiration date of one year, rather than five. Regardless, however, restaurants must clearly disclose the terms, he said.

Also excluded are cards that might offer a free meal or a percentage off the next visit — so long as they do not mention a specific value.

Pierce said restaurant operators must also be careful to comply with state laws regarding gift cards, as the federal rules do not pre-empt local requirements, so long as the state requirements are more protective of consumers.

In California, for example, gift cards can’t have expiration dates, but cards are exempt when no money has been exchanged, such as for a loyalty or reward card. So retailers can set an expiration date on such cards, but, according to state law, it must be printed in all caps in 10-point font on the card, Pierce said.

“The devil’s in the details,” she said.

7 WAYS TO JUICE UP BEVERAGE SALES

Featured in Restaurant Hospitality

Tri-State Area's Premier Digital Dining Business Partner

Your waitstaff carries a lot of weight when it comes to your beverage business, according to a new report from Technomic. Nearly one quarter (23 percent) of consumers in a recent online survey say they would consider ordering a beverage they had not tried before if the server recommended it. Heavy consumers of beverages were most likely to be swayed by a suggestion, with 30 percent acknowledging that a server’s plug for a drink would influence them.

“This likely indicates that these consumers are more open to trying new beverages overall and suggests that operators may be able to use server recommendations to market new, limited-time offers or seasonal beverages toward this group,” says Darren Tristano, executive v.p. at Technomic.

The findings are included in Technomic’s new Beverage Consumer Trend Report, which looks at more than two dozen beverage types, including soft drinks; coffee beverages; bottled water; sports, energy and fusion drinks; lemonade; tea; smoothies; and more. The report contains menu, consumer and competitive insights and looks at current and emerging menu trends and consumer consumption behavior, purchasing decisions, attitudes and preferences for beverages.

Tristano suggests these strategies to spur liquid refreshment sales:

1. Consider investing in a separate nonalcoholic/adult beverage menu and table tents to promote limited-time only seasonal beverages and signature items.

2. Servers should always take a beverage order separately from the food order to create an additional point of choice.

3. Pointing out limited-time only seasonal drinks and signature beverages, which can promote impulse buying behavior.

4. When taking adult food orders, servers should recommend adult beverages that pair well with their entrée.

5. For teenagers, nonalcoholic (and potentially high-profit) mocktails provide an opportunity to feel more like a grownup.

6. Innovative options could be suggested to younger consumers, who show a greater interest in new and unique beverages.

7. Finally, servers should be diligent in recommending coffee, tea or specialty beverages that can be served with desserts.

Overall, Tristano adds, servers should be educated in understanding the varying interests and needs of consumers age groups in offering specialty, adult, traditional and energy drinks.

And if you’re wondering whether the economy has affected alcoholic beverage sales, you’ll be happy to know that the latest Gallup poll says 67 percent of U.S. adults now drink them—a 25-year high. 

To Serve is To Rule in ANY Economy

Featured in RunningRestaurants.com by Laurie Brown

When the economy declines, many companies suffer and some even go out of business. It's not just that people are buying less, it's that their buying habits are changing. I don't know about you, but when money gets tight, I get choosier about where I spend my money. I want not ONLY a great product - I want exceptional customer service too.

It is critically important to up your game when the market is tight. Businesses that have learned to thrive in tough economic times are worth looking at and learning from.

Why is Beau Jacks (a suburban Detroit restaurant) doing so well? What keeps their customers coming back three or four nights a week — even in the midst of Detroit's depressed times? Why are customers willing to stand in line or wait at the bar for long periods of time? The reason is magic – and that magic is the owner, Gary Cochran, and his take on running his business the right way.

Don't do traditional advertising
Cochran doesn't buy traditional advertising. He puts his money into supporting his loyal customers' causes. When his customers ask him to buy ads in yearbooks, pay for sponsorships, or support charitable golf outings, he does it. He says, "I do my advertising with the people who eat with me." How are your potential customers finding out about you?

Keep your staff pumped up
Cochran created a weekly newsletter for his employees. It includes a motivational quote — intended to keep his people thinking positively — at the bottom of every issue. He tells them, "We don't have to take part in this recession if the food and service is great." What are you doing to inspire your staff on a weekly basis?

Have high standards
Cochran makes sure that his parking lot is repaved and painted every year whether it needs it or not. He has an iron and ironing board available outside of the staff's dressing room to help everyone look impeccable. He believes that good is not good enough, and says to his customer's, "I don't want you to pay for good, you pay for great." Paying attention to details can make all the difference.

Treat your customers like members of a private club
Cochran encourages his staff to learn customers' names and preferences. "I always tell my staff that if they worked in a country club, they would remember their customers' names and that they like five olives in their martinis." He also provides his staff with business cards that they give out when they hand their customer the bill. He encourages the staff to tell the customers, "Ask for me next time you come in." How many customers are asking for you?

Treat special needs customers differently
Even though Cochran's customers may be willing to wait up to 45 minutes to be seated, he understands that it can be a hardship. When a customer is using a walker, he tries to seat that customer sooner. If customers have small children with them, the wait staff may place an order for chicken strips (on the house) so that there is food for the kids the minute the family sits down. "One size fits all" is a completely out-dated concept. Don't be afraid to cater to the special needs of your customers. They will love you for it.

Don't ask your employees to do anything you wouldn't do
Cochran hasn't had a day off in the last 18 months. He can often be found with a coffee pot in his hand, bussing tables, or picking up a dropped napkin. He treats his staff so well that he has kept many of his employees for decades. His newest employee has been with him for six years.

Are you a servant leader? Do you model the kind of behavior that you want your employees to emulate? Don't be afraid to do what has to be done. It will inspire your employees and your customers.

Empower your employees
Cochran's servers know that if they are overwhelmed with customers and are unable to provide great service, they can buy the customer a dessert with apologies. If there is a problem with food, they know that they can go to the chef or a manager and get the issue resolved. Are your employees empowered to solve the problems that occur in your workplace?

Even in the hardest times, focusing on exceptional customer service can make your business virtually recession-proof. Pick one tip and try it for two weeks. Then add another. Be patient and stay focused. Truly great customer service is a differentiating factor that can't be beat.

4 Ways to Beat Your Restaurant Competition

1. Know Your Enemy
In the ancient words of author Sun Tzu ("The Art of War") , you must "Know your enemy as you know yourself and you can fight a hundred battles with no danger of defeat."

In today's world I hope you look upon your competition in a friendlier light then Tzu did but the message still holds true. It is extremely important to know the details of your competitors.

Go eat at their establishments and find out for yourself how their food tastes, what their service standards are and what their marketing message is. My advice, make sure your food is as good and your service is better.

2. Market Your Specialty
Once you know everything about your competition you can identify what it is you offer that is unique or special. So what do you do if you don't have anything that makes you unique or special...you get it! When a guest asks their waiter "what makes this restaurant special", or "what's your specialty here", they need something to talk about.

Once that specialty is defined you can build your marketing message and spread the word with the help of your service team (who are really your salespeople).

3. Tune in Your Customers
If you want to be competitive you have to give your guests what they want while keeping in mind their wants may change quickly. Of course we all know they want great service but there are other things as well.

For instance, if a large percentage of your lunch comes from a business that just implemented a strict lunch hour you need to make sure your staff understands that those guests need to get in and out in under 1 hour. If you are noticing people aren't ordering as much chicken because of the bird-flu scare then run beef specials.

If you really want to know what your customers want, ask. Say something like this: If you could wave a magic wand and change one thing about my restaurant what would it be?

4. Touch Your Guests
In any business, complacency is the enemy. If the owner, general manager and service team aren't continually working the floor, thanking the guests for their business and asking them to come back, you can be sure your competitors are. People like to eat out at places where they feel welcome, special and important. So make this a top priority in your restaurant.

Setting up an ongoing marketing program that "touches" your customers is a great tool to build your business as well.

The Real Value of Tableside Handheld Ordering

Posted in Hospitality Technology by Brian Vick, Owner of Brian's Cheesesteaks



The on-going goal of improving both profitability and customer return visits is constantly on the minds of restaurant owners and mangers. While numerous articles and opinions have focused on how to use loyalty programs, aggressive (and smartly applied) promotions, and advertising through social media, these are not the only strategies that operators need follow in the pursuit of their goals. Handheld wireless ordering, which has remained under the radar as a way to realize tremendous costs savings and increased profitability for some time, is rapidly coming to the forefront as more proprietors recognize the value of such devices. What's more, new, low-cost technologies like Apple's iPod touch and iPhone, are putting handhelds in an even brighter spotlight.

Six Benefits of Handheld Ordering
The first improvement realized was a decrease in the average amount of time a ticket was open (from order until delivery) at the table by a little over 40%. Servers no longer had to waste time walking to and from the point of sale (POS) station, wait to place the order due to being stopped by customers at a another table, or stand in line if another server was using the POS station to place their own order.

The second and third improvements that resulted were directly related to the decrease in the open ticket time. Speedier service led to increased table turns, and perhaps more importantly, a greater average check amount. Why? Customers now had time for dessert which was additional revenue that went right to the bottom line. Restaurants are able to seat more customers during the day and generate a 10% revenue increase at the same time.

The fourth improvement came in the form of improved customer service levels. Not only did customers' meals arrive more quickly, but they knew that as soon as they told the server what they wanted, the order was off to the kitchen. That helped drive more repeat business. Believe it or not, customers pay attention to how long it takes their server to place their order after leaving the table. Since the order was placed instantly, servers simply moved on to the next table to make sure everything was all right, take the next order or up-sell that dessert.

A fifth improvement was a dramatic reduction in order errors. The kitchen no longer had to decipher hand-written tickets and eliminated the precious time spent recalling the server to clarify an order. That not only improved customer service and speed-of-order-delivery even more, but it directly took out cost and waste from orders read incorrectly and the resulting remakes.

A final benefit is that environmentally conscientious proprietors can "go green." It may seem trivial, but using handhelds significantly reduced power consumption. Even the most efficient POS terminals use a lot of electricity, but handhelds use only a fraction of that.

New Technologies Come Into Play
Today, handheld POS ordering and payment solutions have moved toward low-cost, easy to use and intuitive devices such as an iPod touch. This is dramatically changing the attitude toward tableside ordering and payment. The iPod and iPhone interface is well known to today's generation of servers, and some input methods, such as using abbreviations, is as easy as texting without requiring servers to drill up and down through endless order entry screens. In addition, many servers already have these devices so there is virtually no additional cost as they simply download the POS app.

With PCI Compliance and the ever-present threat of customer's credit card information being "skimmed," pay-at-the-table will soon come to the front and center as customers are more reluctant to let their credit card leave their sight.

The proven benefits of handhelds, along with the changes in technology, have put tableside ordering and payment more into the spotlight than ever before.

Sign Up to Find Out "How To Select A POS System For Your Restaurant" Webinar

As a leader in your organization, you’re expected to make smart business decisions to stay ahead of your competition. Your team looks to you for strategy, ideas, and leadership.

We know it’s not easy to stay on top of emerging technologies and new business strategies. There never seems to be enough time in the day to learn what strategies the elite restaurant and hospitality organizations are implementing to thrive in this challenging economy.

Join us on August 5 for our Thought Leader webinar series as we present, How To Select A POS System For Your Restaurant

You’re an expert in the restaurant and food service business, but do you know how to select a Point of Sale (POS) system that fits your business today and will grow with your business in the future?

In this webinar, you’ll learn:

The differences between a general POS system and restaurant POS system

How certain technologies can speed up service

Which POS features are must-haves for restaurant owners

How to select a POS system that fits your business today and will grow with you in the future

When you stop learning, you stop growing. Register Now >>

9 Ways Restaurants Can Use Facebook

Should your restaurant be on Facebook? Well, Facebook has over 400 million users, and it claims that 50% of its active users log in at least once per day. It’s a great way to promote your restaurant and its going on and best of all, it’s free. So the question is really why you wouldn’t be on Facebook. To help get you started or to help you get the most out of your restaurant’s current Facebook page, we bring you 9 ways restaurants can use Facebook.

1.Create a Facebook Page
This one seems obvious. Creating a Facebook page is simple: Just sign up and fill out the basic information about your business. Click here to sign your restaurant up for its own business page. You can also designate yourself as a local restaurant under the “Local” option. Many smaller restaurants have abandoned their own website in favor of their Facebook page. Some restaurants have both and link them together.

2.Use Updates to Convert Fans to Your Marketing Goals
Posting simple status updates about your business — or really, anything you think is relevant — will be seen by users in their homepage news feeds. This is a great way to keep your “fans” updated with your goings on as well as to stay top of mind when your fans are thinking about dining out.

3.Interact with Your Fans as Much as Possible
When a customer approaches you in real life to tell you what they think of your business, you’ll listen. So why not on Facebook? You might hear some useful criticism, or some timely compliments. Also, when you respond, you’re more likely to get them to respond — this additional activity further increases the chance your fans’ friends will see and learn about you.

4.Create and promote events online and offline
Let people know about a special Mother’s Day brunch or a regular Friday Happy Hour by sending invitations and ask people to RSVP on Facebook. This can be a great way to increase viral marketing as information about Facebook Events travels through news feeds from your network of friends and family outwards to create a greater social media footprint.

5.Use Multimedia to Show Off your Food and Dining Experiences
Photos and videos say a lot about food, if not the overall style of your establishment. Make sure to let your fans see what you offer by posting your latest or most prized dishes. Also, photos and videos of events and happy hours can be great PR.

6.Integrate Your Page with Other Marketing Efforts
Are you also running some sort of contest or special on another site? Make sure your Facebook fans know about it. Integrate all your marketing channels. The more touch points you have with your customers and potential customers the better chance of success you have.

7.Use Existing Applications to Promote Your Story
Polls, quizzes and other types of applications are readily available within the admin section for page owners, and they just take a few clicks to install. Start off modestly, try a few, and see what works.

8.Make your Page engaging with applications
Show your restaurant’s great ratings by displaying the Zagat application or add a reservations widget through Open Table on your main page; display a video of the chefs making the house’s special; allow users to click through an interactive menu. The possibilities are endless.

9.Create an App Just for Facebook Fans
A little more advanced and this is for restaurants with larger marketing budgets, but it’s worth exploring whether or not an app would make sense for your users.