For
Restaurateurs A Gift Certificate Sale Is Like An Interest
Free Loan
--By Chuck Gohn
Think about it. Customers
give you hard cash in exchange for a piece of paper that may
or may not be redeemed at some future date. In the meantime,
you have free use of their money to purchase inventory, pay
the rent, or help make payroll. Too bad your banker isn't as
generous.
So why do so many
restaurateurs shy away from aggressively marketing gift
certificates? I suggest that many operators view gift
certificate sales as a high risk, low benefit venture.
Consequently they budget little or no advertising dollars to
promoting gift certificates, and they make purchasing them
as convenient for their customers as a trip to the DMV.
Yes, a certain amount of
risk is involved in selling gift certificates. In fact,
there are almost as many ways to embezzle money using gift
certificates as there are espresso carts in downtown
Seattle. And with high tech printing as nearby as the
neighborhood copy center, the risk has become even greater.
According to Frank Abignale a one time forger turned
security consultant, gift certificates are an easy target
for color copiers - especially if the buyer can persuade the
restaurant to leave the payee's name blank.
The bottom line is that
gift certificates are equivalent to CASH, and should be
treated accordingly. But don't let their vulnerability
frighten you. A few simple controls will help ensure that
gift certificates don't become the Nightmare Before
Christmas:
DON'T BUY
GENERIC GIFT CERTIFICATES
Avoid the temptation to
purchase the generic "A Gift For You" gift certificates at
the local stationary store. Not only are they unattractive,
but there is little to prevent a con artist from purchasing
a pack or two at the same store and redeeming them at your
restaurant. Invest in custom designed certificates that
include your company logo or other features that distinguish
your certificates from the no name brands.
AVOID REFUNDING CASH
Add a line to your custom
certificates stating that any unused portion in excess of
$5.00 will be issued as a new gift certificate. That way if
a lost or stolen certificate goes undetected, you may
prevent someone from using a $50 gift certificate to
purchase a $5.95 hamburger, and receiving the balance in
cash.
MAKE THEM
DIFFICULT TO DUPLICATE
Consider adding some
security features to your certificates such as an embossed
logo or artificial watermark to help prevent unauthorized
photocopying. One of the more effective features is the Copy
Void Pantograph. If someone attempts to photocopy your
certificate with a color copier, the word "void", "copy" or
other custom message becomes apparent, making the copy
non-negotiable.
KEEP A LOG
Set up a Gift Certificate
Log and enforce its use. Require that all items on the log
be completed for each certificate issued. If your employees
have a habit of forgetting to log the relevant gift
certificate information, then consider using two part
carbonless (NCR) certificates that will help ensure that all
of the information gets recorded at the time of the sale.
REVIEW THE
LOG DAILY
Even the most
meticulously maintained log can leave a big hole if someone
is not verifying the information contained in it. Review the
log each day to verify that all certificates have been
accounted for. Follow-up immediately on any missing
certificates, and tie the gift certificate sales and
redemptions per the log to your POS register tape.
________________________________________
Chuck Gohn specializes
in accounting systems and cost control for restaurants. He
can be reached at 800-595-2326. |
