The three cost buckets
Almost every gift card quote you will ever read decomposes into three things, no matter how the vendor packages them. If you separate them before you compare providers, the comparison takes ten minutes. If you let someone blend them into one monthly number, you will not find out where the money goes until the second invoice.
Card stock
This is the plastic: printing, finish, and shipping the box to your restaurant. It is a one-time purchase per order and it prices in quantity tiers, so the per-card cost falls as the order grows — which is why a very small first order can feel expensive per unit while being cheap in total. Design is where restaurants expect to get charged and where Factor4 does not charge: you send artwork or a logo, we lay the card out, proof it with you, and print it. Premium finishes, custom shapes, and unusual materials all cost more than a standard card; a standard card sells perfectly well.
Platform fee
This is the recurring charge for the thing that actually makes a card work — holding balances, authorising redemptions in real time, keeping card-level history, and producing the liability reporting your accountant needs at year end. It is billed monthly and it does not scale with how good December was, which is the point: it is the floor you carry in your slowest month. When you compare providers, compare this number annually rather than monthly, because that is the figure the program has to earn back.
Per-transaction fees
Then there are the events: activating a card when it is sold, drawing it down when it is redeemed, and in some programs reloading it or checking its balance. These are small individually and they are the bucket most likely to surprise you, because their total depends entirely on volume you cannot forecast before launch. Ask for each event priced separately. A provider quoting "transaction fees" as one line is describing something you have not seen yet.
What Toast's native gift cards include — and where they stop
Toast sells its own gift cards, and for a single-location restaurant that has no plans to be anything else, they are a reasonable place to start. They are bundled into Toast's pricing, they redeem in Toast without you configuring anything, and the tender lands on your checks the way you would expect. Nobody should pretend that is worthless.
Where they stop is the platform boundary. A Toast gift card is a Toast object: it exists inside Toast, works where Toast is running, and does not travel. That is invisible until the day it isn't — a second location on a different POS, an acquisition that came with its own system, a franchise partner who signed elsewhere, or a decision to change platforms entirely. On that day the card program does not migrate with your brand. Outstanding balances belong to the software you are leaving, and you are choosing between honouring them by hand and telling guests their card no longer works.
The other limit is the reporting and the marketing layer. Native cards do the tender well and the program thinking barely at all: no promotional card mechanics, no bulk or corporate ordering workflow to speak of, no pooled liability view across a group, and no way to layer loyalty on the same balance later without starting over.
None of that argues for spending more than you need to. It argues for asking a different question than "which is cheaper this month." The right question is what the program costs over three years, including the cost of the migration you have not planned yet.
Fees that aren't on anyone's pricing page
The published rate card is the part vendors compete on, so it tends to be honest. The charges that decide whether a program was a good deal live in the contract instead, and you have to ask for them by name.
Dormancy or inactivity fees are the worst of them. After a card sits unused for some period, the program starts deducting a monthly amount from the balance — money your guest still believes is theirs. You do not see it; they see it, at your counter, and your manager gets to explain a fee your restaurant did not knowingly agree to charge.
Reload fees apply when a guest adds value to an existing card, which is exactly the behaviour a good program is trying to produce. Charging for it taxes your best customers. Statement or reporting fees are a monthly charge for documents the platform generates automatically; they are pure margin and they are negotiable.
Cancellation and early-termination fees are the ones to read hardest, because they price your exit before you have any reason to want one. Ask what it costs to leave, what happens to outstanding balances when you do, and whether your card data comes with you. A provider confident in the product answers all three without hedging.
Get the answers in writing, from us and from everyone you are comparing. A vendor who will not put a fee schedule in an email is telling you something.
Break-even math on a restaurant's average check
Break-even on a gift card program is a count of cards, not a length of time, and the arithmetic is short enough to do on the back of a receipt.
Add the annual platform fee to the cost of your card order. That is the number the program has to earn. Then work out what one sold card actually contributes. A card sold for the price of an average check does not contribute the whole face value — that is revenue you would likely have earned anyway when the guest visited. What it contributes is the difference: the uplift when the guest spends past the balance, the visits from recipients who were not your customers before, and the portion of value that is never redeemed at all. Across the industry, redeemers routinely spend meaningfully more than the card is worth, and a real slice of issued value never comes back.
Divide the annual cost by that per-card contribution and you have your break-even count. Most restaurants find the number is smaller than a single strong December, which is why the honest version of the sales pitch is not "this will transform your revenue" — it is "this clears its own cost early in the holiday season and everything after that is margin."
Run the same arithmetic on any quote you receive, including ours. If a provider's numbers only work under assumptions about your volume that you would not make yourself, that is the answer.
Physical vs digital cost
Physical cards carry a real unit cost: printing, finish, and freight, paid up front by the box. Digital cards have none of that. There is nothing to print, nothing to ship, and nothing sitting in a drawer, so the only cost of an additional digital card is the transaction it generates when someone buys and redeems it. On unit economics alone, digital wins comfortably.
Unit economics is not the whole picture. Physical cards sell because they are visible — at the host stand, next to the register, in the hand of a guest asking for something to give. They are also the format corporate and bulk buyers want, and they are the one a guest can wrap. Digital cards sell at midnight from an Instagram link when your dining room has been closed for two hours, and they can be sent by email or text to arrive on the day they were meant for.
The practical answer for most restaurants is both, weighted by how they actually sell. Start with a physical order sized to your counter traffic rather than to the best quantity tier — reorders are quick, and unsold plastic is the one gift card cost with no upside. Let digital absorb the seasonal spike, since it has no minimum, no lead time, and no ceiling in the week before Christmas when physical stock has already run out.
Both formats are included in a Factor4 program, on one balance and one design, so this is a merchandising decision rather than a purchasing one. If you run more than one restaurant, the format question is less consequential than whether the balance travels between them — which is the point of a multi-location gift card program.
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