Gift Cards for Cafés: How to Sell More This Christmas

A gift card is one of the few things a café sells that brings in money before anyone has had a coffee. It is also a way to meet new customers: the person who spends a card is often someone who has never been in before, sent by a regular who likes you.

December is when most gift cards sell. Shoppers want something small, local and easy to post in a card. If you start selling them in November, you catch the people who plan ahead as well as the last-minute rush. This guide covers how to set up café gift cards, what values to offer, how they are treated for VAT and in your books, and how to sell more of them.

Why gift cards suit a café

• Cash now, cost later. You take the money in December and pay for the coffee and cake when the card is spent, often in the quieter weeks of January and February.
• New customers. Many cards are bought by regulars for friends, family or colleagues who live nearby but have not tried you.
• People tend to spend more than the card. A £20 card rarely buys exactly £20 of food and drink. Guests often add a little on top, which you take as a normal payment.
• Some cards are never fully spent. A small part of the value on some cards is never used. That is not something to plan around, but it does happen.

Paper, plastic or digital?

There are three common ways to sell café gift cards:

• Paper vouchers written by hand. Cheap and quick, but easy to copy, hard to track and easy to lose. You have to keep a book of who bought what.
• Plastic cards with a magnetic strip or barcode, usually from a card supplier. They look good in a gift but cost money to order, and you need a system to read them.
• Printed or digital cards with a code. You sell the card from your till system, which makes a unique code and keeps the balance. You print it on card or paper, and the customer can spend it at the counter or online.

The third option gives you the tracking of a plastic card without ordering stock. Whatever you choose, the key is that every card has a unique code and a balance you can check, so a card can only be spent once.

Choosing values

Keep the choice simple. Three or four fixed values cover most buyers:

• £10: a coffee and cake for one, a stocking filler or a thank-you for a teacher.
• £20: brunch for one or coffee for two. Usually the most popular.
• £30 or £50: lunch for two, or a bigger gift.

Let staff sell a custom value too, for the customer who wants £15 or £25. Round numbers are easier to remember and easier for staff to say at the counter.

Expiry dates and terms

UK law does not set a minimum or maximum expiry for gift cards, so it is your choice. What matters is that the terms are clear when the card is bought. Common choices are 12 or 24 months, or no expiry at all.

• A longer expiry feels more generous and avoids awkward conversations at the till.
• A shorter expiry keeps your records tidier, but a card that runs out in a few months can feel mean.

Print the expiry date on the card, along with a short line of terms such as "No cash value. Cannot be exchanged for cash. Lost cards cannot be replaced." Keep the terms short enough to read.

How gift cards are treated for VAT

Gift cards are vouchers for VAT. Since 2019, UK rules split vouchers into two types:

• Single-purpose vouchers, where you know the VAT at the moment you sell it, because it can only be spent on things with one VAT rate. VAT is due when the voucher is sold.
• Multi-purpose vouchers, where you don't know the VAT when you sell it, because the card could be spent on a hot coffee (standard-rated) or a cold sandwich to take away (zero-rated). VAT is due when the card is spent, on what was bought.

A café gift card that can be spent on anything on your menu is usually a multi-purpose voucher. So the sale of the card itself has no VAT, and VAT is worked out on the day it is spent. If you sell a card that can only be used for one thing, or you are not sure which applies, ask your accountant. HMRC's guidance on vouchers explains the rules in full.

How gift cards show in your books

When you sell a gift card, you have not made a sale of food or drink yet. You have taken money you owe back as food and drink later. Your accountant will usually record it as a liability, money owed to customers, until the card is spent.

That has a practical point for you: a gift card sale should not appear in your daily sales figures. If it does, December looks better than it was and January looks worse. Keep card sales separate from food and drink sales, and count the sale on the day the card is spent.

Where to sell and display gift cards

Most café gift cards sell because someone sees them at the right moment. A few places that work:

• By the till. A small sign or a stack of cards next to the card machine catches people as they pay.
• On your menu. Add a line at the end of your QR menu or printed menu: "Gift cards from £10, ask at the counter."
• On social media. One post in late November and another in the week before Christmas, with a photo of the card in a gift envelope.
• In your loyalty messages. If you have regulars who have agreed to hear from you, a short message about gift cards in early December works well.
• Beyond Christmas. Gift cards sell again before Mother's Day, Father's Day and Valentine's Day, and as last-minute birthday presents.

Train staff to offer one line: "We do gift cards if you're stuck for a present." It costs nothing and many people simply had not thought of it.

A worked example in pounds

Here is an illustration for a café that sells gift cards from mid-November to Christmas. Swap in your own numbers.

• Cards sold: 25 at £10, 35 at £20 and 10 at £50.
• Money taken in December: £250 + £700 + £500 = £1,450.
• Spent from January: say the cards are used over the next few months, and a guest with a £20 card spends £24 on average. On the 35 £20 cards that is £140 of extra spending, paid by card or cash on the day.
• New faces: if half of the 70 cards go to people who had never been in, that is 35 new customers who now know where you are.

The food and drink cost of the cards is paid when they are spent, not when they are sold. If your food cost is about 30%, the £1,450 of cards will cost you roughly £435 in ingredients, spread over the following months.

Keeping gift cards secure

• Unique codes. Every card needs its own code. Avoid simple numbers like 001, 002, which are easy to guess.
• Check the balance before you spend it. Staff should check the code and the balance before taking it as payment.
• Spend it once. The system should take the value off as soon as it is spent, so two people can't use the same card.
• Record who sold it. If a card is ever disputed, you can see when it was sold and who sold it.

How it works in Café QR

Café QR has gift cards built in, so you can sell them at the counter and take them wherever your guests order.

• Sell a card in a few seconds. Open Gift cards, type the value from 1 to 5,000, choose how the customer paid and whether it expires after 6, 12 or 24 months or never. Café QR makes a code such as GC-7K4M-QX9P and a card to print with your café's name, the value, the code and the expiry date.
• Codes that read out clearly. Letters and numbers that are easy to mix up, such as 0 and O, are left out, so a code read out at the counter still works.
• Spend it anywhere. Take a card at the till, with the rest by cash or card if it holds less than the bill. Guests can pay with a card on the QR menu at the table, at the self-order kiosk and on your online order page when it covers the whole bill.
• Kept out of your sales until spent. Selling a card doesn't count as a sale. The sale counts on the day the card is spent, with the VAT for what was bought.
• Every card has a history. When it was sold, what was spent and when, and what is left.

Gift cards come in the "Gift cards and automatic deals" add-on at £4 a month, and are included in the POS plan at £39 per venue a month. Cards are sold by staff from the dashboard; guests can't buy one online yet. See how gift cards work in Café QR.

Related reading

• Christmas Loyalty Offers for Cafés: Ideas and Plan
• How to Set Up a Café Loyalty Scheme
• Coffee Shop Marketing Ideas