Cattlemens Restaurants

Cattlemens’ Conversion to Gift Cards Increases Sales by 20 Percent

Cattlemens is a casual, western-themed steakhouse chain. Founded in 1968 by a father and son team with decades of experience in the cattle business, Cattlemens has ten locations throughout California and Arizona.

Cattlemens’ Paper-Based Gift Certificates: Simple Yet Costly

Several years ago, Cattlemens Restaurants had a system of issuing handwritten paper gift certificates. Although the number of gift certificates being issued was growing each year, the growth was causing headaches. The paper system was theoretically simple, but administering, running and tracking it was problematic. Moreover, the blank gift certificates were difficult to promote around the restaurant beyond the cashier’s desk because of the potential for theft and fraud. Another drawback presented itself when cash had to be issued back when the redemption fell short of the full amount. Cash refunds essentially meant losing the full value of the original sale and a loss of high margin revenue.

In 2000, Cattlemens began investigating alternative ways to manage gift certificates, including the use of electronic gift cards. After researching some gift card suppliers, Cattlemens received a positive reference for Opticard. Cattlemens discovered that Opticard’s service was established in several restaurants. Among many other things, Cattlemens also liked Opticard’s straightforward pricing model, which allows organizations to easily forecast and match expenses to revenues. Opticard met all of Cattlemens’ criteria, and the restaurant chain ultimately selected Opticard to be its gift card program partner.

Cattlemens Puts the Gift Card Service to Practice

The Opticard staff provided an immediate implementation plan that moved first from stand-beside terminals to integration with Cattlemens’ Micros® POS system. The service was up and running in a very short period of time.

“The Opticard gift card service has been very successful for us,” said John Frenzel, Marketing Director for Cattlemens Restaurants. “We’ve solved all of the problems we had with the paper certificates, and we’ve been able to market the gift cards aggressively, which has increased our sales.”

Today, Cattlemens has much more control over its gift program. Since the gift cards have no value until they are swiped at a terminal, Cattlemens can place promotional displays featuring the gift cards. The cards also allow Cattlemens to get creative. For instance, the Cattlemens gift cards have been used as Christmas ornaments, worn by the staff as name badges, fashioned into necklaces and placed on signage throughout each restaurant. “We have staff contests for the most creative ways to promote and sell the gift cards,” said Frenzel. “People really get into it.”

With Opticard, Cattlemens can now sell gift cards on its Web site, which has allowed the restaurant chain to market to customers it had previously been unable to target. “We are based in Western states, but since we started selling gift cards on the Web, we have had people from across the country buying cards,” said Frenzel.

Opticard also offers Web-based reporting tools that provide real-time data and analysis, which is available to managers and corporate staff throughout the organization. Opticard’s Web reporting tools also provide immediate breakouts of gift card sales categorized by location, POS devices and even by each staff person authorized to issue the cards. Additional features such as tracking and reporting on the point of sale, issuance, usage and duration of gift cards has made Cattlemens’ administration of the program much easier; even as it has grown year-over-year.

Opticard Provides True Value

The average purchase and redemption amounts for Cattlemens’ gift cards have been much higher than its paper certificates. The average purchase price of a gift card is about $50, but the average redemption is nearly $70—so the gift cards are generating revenues beyond their issuance amounts. “Paper might be cheaper on a per certificate basis, but it doesn’t bring the revenues in like gift cards, and now we keep every dollar issued on the card,” said Frenzel. “The Opticard service has made a significant financial impact on our operation.”

Overall, Cattlemens has increased gift card sales 20 percent annually since implementing the Opticard gift card program. “Opticard provides outstanding follow-up, and they are true partners,” said Frenzel. “Our teams work together to find the best solution for Cattlemens, which saves us time and money.”