Study: Texas Roadhouse Rules the Gift Card Game | Food Newsfeed
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Texas Roadhouse reported comparable same-store sales growth of 4.5 percent in the third quarter.

Study: Texas Roadhouse Rules the Gift Card Game

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Gift cards represent a major swath of business for restaurant brands. And according to one study, nobody does it better than Texas Roadhouse.
By Danny Klein January 2018 Chain Restaurants

NAPCO Research released a report sponsored by CashStar breaking down the most effective gift card programs in the restaurant industry. The data includes online purchases of both digital and plastic cards. According to data from statista.com, a statistics portal that pulls data from more than 18,000 sources, gift cards are forecasted to be a $160 billion market across all industries in 2018, and for the past 11 years have been the most requested holiday gift by consumers.

NAPCO created its study be conducting a cross-platform assessment of brands based on nearly 100 criteria, including the online consumer purchase and recipient experience of digital and physical cards, as well as merchant business-to-business e-commerce offerings, and the use of gift cards for marketing initiatives.

The report then evaluated criteria impacted by a range of stakeholders across merchant organizations (gift card, e-commerce, marketing, etc.), as well as gift card platform providers and fulfillment partners. Research was conducted from July–August 2017. The research is the first evaluation to include online purchases of both digital and plastic cards, as well as mobile purchase experiences, merchant B2B gift card offerings, and the use of gift card promotions.

“For gift card purchases, we took all steps possible to ensure purchases typified actual consumer gift card transactions [e.g., we bought graduation gifts for real recipients with real email and physical addresses, used appropriate card designs and messages for the occasion, notified the credit card company that we would be purchasing many gift cards],” NAPCO explains in the report. The experiences were evaluated across desktop and mobile.

Here are some of the criteria:

  • Discoverability
  • Payment options
  • Personalization
  • Upsell
  • Buyer communication
  • Seller communication
  • Delivery options
  • Delivery timeline
  • Packaging
  • Integrated cart
  • Purchase process
  • Customer service
  • B-to-B offering
  • Promotions
  • Innovation

Each brand was given a score out of 200. Here’s how restaurants stacked up.

  • Texas Roadhouse: 65
  • IHOP: 63
  • Red Lobster: 63
  • Chili’s: 62
  • Olive Garden: 60
  • Starbucks: 58
  • Chipotle: 57
  • The Cheesecake Factor: 55
  • Applebee’s: 54
  • Buffalo Wild Wings:54
  • Dairy Queen: 53
  • Cracker Barrel: 53
  • Outback Steakhouse: 48
  • Domino’s: 47
  • Dunkin’ Donuts: 47
  • Subway: 45
  • Burger King: 44
  • Panera Bread: 38
  • Denny’s: 23
  • Pizza Hut: 21
  • McDonald’s: 14
  • Wendy’s: 11
  • Arby’s: 9

The top performer, Texas Roadhouse, has reported strong financials in recent quarters. In the third quarter, the chain reported comparable same-store sales growth of 4.5 percent at company-owned units, year-over-year, and 4.7 percent at domestic franchised outlets. Those numbers rose 4 and 3.6 percent, respectively, in the previous quarter.

Texas Roadhouse’s gift card program features electronic gift cards that can be sent via email or Facebook, and don’t carry processing fees or shipping costs, as well as pre-designed and customizable designs. There are also design-your-own gift cards, which come packaged in a full-size customizable greeting card. The standard pre-designed gift card is an option as well, as is a personalized gift card meant for business transactions. The latter can be personalized with a company logo and features 10 percent discounts on orders of $1,000 or more.