The rise of card-linked offers: Why restaurants are turning to them

It's no secret that the restaurant industry was hit hard when the lockdowns first started in 2020. Many restaurants were looking for new ways to market to consumers and entice them back to their restaurants when things opened up. As a result, the adoption of card-linked offers became not just a trend but a tool for restaurants to increase their customer engagement.

As lockdown measures gradually eased, restaurants started to envision a return to normalcy. Many continued to recognize the value of card-linked offers, leveraging them to drive engagement and retention. As a result, card-linking has seen growth in adoption, and it's likely that this trend will continue.

In this article, we will dive into the rise of card-linked offers and, specifically, why restaurants have turned to them to provide value to their customers.

Growth of card-linked offers:

Card-linked offers (CLOs) have grown rapidly, fueled by technological advancements and evolving consumer behaviour. Unlike traditional offer schemes that require a separate card or remembering a membership number, card-linked programs make the process easier. Customers only need to register their payment cards; rewards are automated after each purchase.

The rise of digital wallets, mobile banking, and contactless payments has contributed to the growth of CLOs. As more customers shift to digital payment methods, integrating CLOs into these platforms becomes a natural extension, further driving adoption. In fact, More than half (53 percent) of people use digital wallets more often than traditional payment methods, and the number of digital payments is expected to rise.

A study conducted by DCA-Cardlinx showed that 52 percent of participants (small to enterprise-size companies) used card-linked offers in 2022, compared with 42 percent in 2020. This represents a 24 percent growth in two years. Businesses are realizing that customers are valuing them. The more customers use card-linked offers, the more they enjoy them. Close to 69 percent of customers who increased their card-linked offer usage in the last year will likely increase their use in the coming 12 months.

In this dynamic landscape, businesses that utilize these programs are well-positioned to foster deeper customer relationships, boost sales, and succeed in an increasingly competitive market.

Adoption of card-linked offers in the restaurant industry

Statistics Canada reported on February 18, 2021, that sales at eating and drinking establishments in Canada dropped 28 percent from the previous year. However, many restaurants found great value in card-linked programs. In fact, restaurants were among the top two merchant categories for card-linking in 2022, just behind e-commerce. By providing value to customers, restaurants could drive more traffic and engagement.

Here are some more reasons why restaurants are turning to CLOs to help drive their growth:

1. Enhanced customer experience: In the ever-competitive restaurant industry, delivering an outstanding customer experience is vital. Card-linked offers elevate the dining experience by offering immediate rewards such as cashback and rounding. Customers value the ease of earning and redeeming rewards effortlessly, resulting in greater satisfaction and loyalty.
2. Adapting to contactless transactions: The pandemic has increased the adoption of contactless payments. Card-linked offers support this trend by allowing customers to earn rewards via their preferred contactless payment methods. This improves safety and convenience and matches the increasing consumer preference for digital transactions. Furthermore, there is a demand for CLOs. Surveys have shown that 1 in 3 customers are interested in receiving card-linked offers from restaurants and food delivery services.
3. Improving operational efficiency: Traditional loyalty programs can be expensive to manage, requiring investment in physical cards, printing, and administrative overhead. Card-linked offers lower these costs by removing the need for physical materials and automating the tracking and redemption of rewards. In addition, rewards such as cashback are pay-for-performance, ensuring operational efficiency.

This new powerful tool provides real value for customers, keeping them coming back. From personalized offers to real-time rewards, it's no wonder why they are growing in popularity.

Olive's approach to card-linked offers

Although card-linked offers have grown in popularity in the restaurant industry, many businesses or platforms trying to engage with customers in new ways can benefit from them. Olive helps turn every transaction into engagement, giving your customers real-time value. Boost loyalty and drive sales with Olive's card-linking platform. Enjoy quick integration, easy customer onboarding, customizable features, and more.