How can I use Comp & Gift Cards in a Holiday Bonus Program?

Purpose: Comps can be issued to show appreciation, appease a customer for a poor guest experience, or as an additional perk for your employees. In this case, they are activated as an additional incentive to purchase more gift cards.

Usage: Comp cards are activated and hold a balance of comp dollars. When they are redeemed, Comp dollars are applied directly to the check subtotal. The discounted check subtotal amount forgives the relative amount of tax applied.

Flexibility: A specific date range can be enforced for redemptions of comp dollars, this can be valuable for driving visits during the post-holiday period that can be slower. These cards can also be loaded with a specific expiration date, all balances that have not been redeemed at that point in time will expire off the cards. If the promotion also runs in-store, activation at the POS can happen in real-time and is more straightforward.

Limitations: Comps come with specific conditions and cannot be used to pay directly for taxes, tips, or delivery fees. They are not considered a form of tender for these expenses. Some online ordering providers may not accept comp dollars for online orders..

Reporting and Liability: Activated comp bonus cards are not treated as a liability, but a potential future expense. Redeemed comp dollars appear as a stand-alone accounting expense.

Purpose: Gift cards are often purchased and given as gifts or rewards.

Usage: Your customers can use a gift card like the would cash or credit card to pay for their order. They present the gift card during checkout at the store or enter the card number with the PIN code for redemption online, and the stored value amount on the card will be deducted from their total.

Flexibility: Gift cards can cover various expenses, including taxes, tips, and delivery fees. They are considered a form of tender and can be applied to these additional costs. Generally, they are available for redemption through all online ordering providers.

Limitations: Legally, gift cards cannot be loaded with an expiration date and have a 5-year minimum period before they can expire. In this use case, as they are not technically purchased by the member, an earlier expiration may be possible but could still lead to legal action. Limiting redemption of these cards to a specific date range may be more challenging depending on your POS and online ordering provider. Activation of gift cards as bonus cards in store may require a POS discount to offset the activation amount, so the customer is not required to pay for the bonus.

Reporting and Liability: Activated gift bonus cards are reported as a liability, redemptions will be included in the same reports used to recognize revenue. If not split out manually, they can be incorrectly reported as part of your gift card liability and revenue and taxed as such. If you use Paytronix for money movement and choose to go with a gift bonus card, ensure you communicate how you would like the system to behave on redemption. By default, the redeemed funds will be moved from the account associated to the store of activation to the account associated with the store of redemption.

Origin: A comp is issued by the restaurant as a goodwill gesture or incentive, while a gift card is typically purchased or given as a gift.

Application: Comp cards are activated and hold a balance of comp dollars. When redeemed, Comp dollars are applied directly to the check subtotal and cannot be used for taxes, tips, or delivery fees. A gift card can be used for these additional costs and functions as a form of tender.

Flexibility and Limitations: Gift cards can cover a wider range of expenses and can be redeemed online; However, they are less flexible in setting a redemption period and activation at the POS.

Liability and Reporting: Comp bonus cards have clear stand-alone reporting options. Gift bonus cards are reported as a liability on activation and as revenue on redemption mixed into your gift card reports. Manual work needs to be done to break out the bonus gift cards, and ensure money movement is processed as expected.