The Promise Behind Your Restaurant Gift Card
As restaurants and bars across the country began to shut down early this week in order to contain the spread of the Covid-19 virus, there was immediate concern for how food service workers would be paid. Relief funds popped up, as did virtual tip jars. One of the most popular ways for raising money, though, has been using social media as a way to encourage regular patrons to buy gift cards and merchandise like T-shirts and tote bags. Soon, though, workers who had already been laid off in order to collect unemployment benefits were wondering: Where would that money be going?
Some owners were being transparent. Nora O’Malley and Phoebe Connell of Lois in the East Village of New York City (where, full disclosure, I used to work) have been updating their followers with how many weeks of pay they are able to guarantee their small staff through gift card sales. So far, four paychecks are covered and the staff is able to quarantine without worrying about paying their bills. O’Malley and Connell are planning to be able to get everyone paid for their usual shifts for six weeks, but hope to be able to open up before then. Their all-tap wine bar works a bit differently from most restaurants and bars, though, by including hospitality charges in a no-tip model.
“In terms of our cash flow, we're used to pushing out a large amount of money for payroll each week,” says Connell. “We know that our employees rely on us, our business, rather than more on customers, and so I think that gave us a little bit more agency to shut down earlier.”
Many businesses haven’t been quite as ready to weather such a storm, though. At Crust Vegan Bakery in Philadelphia, Pennsylvania, owner Shannon Roche was just getting ready for their busy season after a winter spent running on credit. Their eight employees are all paid hourly and work full time, and now they have been cut down to nothing.
“We were trying to keep everyone on until Philadelphia shut down non-essential businesses on Monday at 5 p.m., with four hours’ notice,” says Roche. “As of Monday at 2 p.m. everyone was still working their normal schedule.” All leftover food was divided between staff and three local food banks.
Merchandise and gift card sales for two days did well enough to keep staff paid through their last two shifts, but sales have slowed and employees have been told to file for unemployment. Luckily, Crust’s landlord at their commissary kitchen knows they cannot expect a rent payment for April, but Roche hopes to see relief from the government soon.
“It's not sustainable,” she says, of relying on gift cards and merchandise sales to keep up with bills. “I've seen every local coffee shop in Philadelphia has a fund for their workers, but that's also gonna get capped out really fast.”
Autumn Stanford, who owns Brooklyn Kolache, Swelldive, and Tailfeather in Brooklyn, is still operating a delivery service, selling gift cards, and has opened up a fund for undocumented workers who are not eligible to collect unemployment. She sees going old-school with their delivery model by selling directly to customers, and not through services like Grubhub or Seamless, as an opportunity. Because people have become so accustomed to paying service or delivery fees, they will still charge those, but it will go into the pockets of the business and its staff. Creativity is key in uncertain times.
“From what I can tell, they're not really going to bail out the small businesses,” says Stanford. “The city said, ‘Oh, we're gonna have a grant and we're going to offer these small loans, but I've filled out all the paperwork and nothing has happened.’”
One restaurant that has successfully pivoted to a new model that’s mixed delivery, pickup, pop-up, and donation is Addo in Seattle, owned by chef Eric Rivera -- who’s admittedly always had an “all over the place” business model. Though 60 percent of the restaurant’s revenue was based on tasting menus, a chef’s counter experience, and brunch, he was able to reach out to his regular clientele and ask what they need. The answer has resulted in a range of offerings, from three meals for $95 that come with a bottle of wine per person, to $9 “Addo for the People” bowls at different spots around the city. Folks have chipped in enough money to cover 1,000 bowls so that anyone who’s hungry can partake free of charge. He’s been able to move some of his employees from part to full-time and is still on track to offer them health insurance soon.
“It's just been getting people to understand it and go, ‘Hey, we're all in the same boat,’” says Rivera. “But on our side, you know, with a restaurant, we can do whatever we want. We're not beholden to just being an Italian restaurant, right? We're cooks, man. Dude, it's not rocket science, you know? So for us, it's really in that spirit of going like, ‘Fuck yeah, we cook anything, always’ then just packaging it up, making sure we're following all the rules.”
Jenn Saesue, owner of Fish Cheeks in Manhattan, has also continued to do delivery while selling merchandise and gift cards online, but it hasn’t been nearly enough to keep the entirety of her staff paid. So far, she hasn’t laid anyone off and is keeping her kitchen staff on, hoping to make it by each paycheck. “It’s making something,” she says of what money is currently coming in, “but it’s not enough. I don’t see how it’s going to let us survive this whole thing.”
Saesue and every business owner I spoke to has said that the uncertainty and lack of clarity from the government has been one of the most difficult aspects of the pandemic to endure, as they focus most on how they might be able to weather this and reopen at full capacity when the virus no longer poses a threat.
“There are private opportunities; there are allegedly public opportunities,” says Connell, about possible low or no-interest loans. “We are not relying on any of that -- we assume that you know that the lines are out the door; the backlog is going to be massive. Even if the government releases something tomorrow or today that says, ‘We're going to give X amount of money to small businesses,’ we assume that we wouldn't even see that money for a few months.”
Gift cards, merchandise, and delivery are essentially a last resort in a time when no one knows what the future holds. As more and more people enter quarantine, we are left wondering whether our favorite places will be there for us on the other side.