How Does Work?

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How Works sells gift certificates to local restaurants at deep discounts. Their normal price is $10 for a $25 gift certificate, but they often run promotions where you can buy the same $25 gift certificate for just $2 or $3.

$25 worth of food for $2! What’s the catch?

Each restaurant has their own set of restrictions. Some of the most common restrictions:

  • Minimum purchase ($35 or $50)
  • Dine-in only
  • Not valid Friday or Saturday night
  • Alcohol does not count toward minimum purchase
  • Not valid toward tax or tip
  • Limit 1 per table
  • Not valid with any other offers
  • Expires 1 year from date of issue (except in CA where apparently it is illegal for gift certificates to expire)

But abide by these rules and regulations, and the gift certificates really do work!
how does work

The Business of

I couldn’t find out for sure, but I don’t think has a revenue-share agreement with the restaurants themselves. Meaning whatever they charge for the gift certificate, keeps 100% of the proceeds.

So restaurants are essentially “giving away” $25 gift certificates to get people in the door. Why would a restaurant sign up for this “service?”

  • Attract new customers. Having a gift certificate mitigates risk for new customers to try a new restaurant. Maybe they’ll become regulars. Or maybe they’ll become regulars who always come armed with a gift certificate.
  • Fill empty tables. Empty tables are a huge opportunity cost for restaurants. Their overhead is the same whether the place is empty or packed, so might as well fill it, even if it is with low-profit-margin customers.
  • Attract large parties. Sometimes customers will come with a group of 4-6, which will more than make up for the discount given.
  • Customer feedback.’s online system surveys each customer after they redeem their gift certificate. While this feature is less valuable now that sites like Yelp are popular, it is still a chance for the restaurant to get candid feedback from customers.
  • Gives the restaurant an online presence. Obviously this feature was a bigger selling point back in 1999 before every restaurant had their own website, but is still preferable to have more web “real estate” than less.
  • Cost-per-acquisition comparable or less than other advertising. As far as I can tell, is “free” for restaurants to sign up. They just have to be willing to basically give discounts on customer checks, after certain criteria are met. Relative to Val-Pak or other print, online, or radio advertising, may actually be a cheaper method of customer acquisition.

So makes their money selling gift certificates someone else has to honor.

I have to admire any business with a gross margin of 100%!

Clearly, they have some infrastructure costs, website maintenance, etc. But their biggest cost has to be the sales staff required to sign up new restaurants and keep current accounts happy. Expert Tips

  1. Read the fine print. Look for restaurants with a low minimum purchase, without day-of-week restrictions, and without exclusions on what you can order (alcohol, etc).
  2. Check Yelp to see if the place is any good. Getting a good deal on bad food isn’t really that good a deal.
  3. Search for promo codes. You can usually find one for 50-70% off — meaning your $25 gift certificate will only be $3 – $5 instead of the $10 regular price.

Here’s my “real life” example. I searched our zip code on and found a list of restaurants. Some I’d heard of and some I’d even eaten at, but most were unfamiliar. I was attracted to Mexxi’s Restaurant and Catering in nearby San Ramon. Time to work the system.

  1. Restrictions: Minimum purchase $35, dine-in only, not valid toward tax or gratuity. This means drinks count toward your $35, and you can go any day of the week. Awesome.
  2. Yelp. 4 Stars. Also a 2009 “Best of the Bay” winner.  Score.
  3. Promo code. In under 5 seconds I found a code for 80% off.  Sweet.

So for $2, I acquired a $25 gift certificate to Mexxi’s. Cost Example

How will the math work once we go and eat?

Let’s say we order the minimum $35. Add in tax (10%) and gratuity (18%) and the new total is $44.80… call it $45. Knock off the $25 gift certificate and we owe $20. Add in the $2 I paid for the gift certificate, and the out-of-pocket total is $22. More than half off, not a bad deal! Weekly Promo Offer 125 X 125

For the restaurant though, maybe it’s not the greatest deal. Of our $20 spent at the restaurant, $9.80 was tax and tip.

Not being familiar with typical margins at Mexican restaurants, I can’t say whether or not Mexxi’s will make money collecting $10.20 on a $35 check.

My guess is they at least break-even or else they wouldn’t be signed up with

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Nick Loper

About the Author

Nick Loper is a side hustle expert who loves helping people earn more money and start businesses they care about. He hosts the award-winning Side Hustle Show, where he's interviewed over 500 successful entrepreneurs, and is the bestselling author of Buy Buttons, The Side Hustle, and $1,000 100 Ways.

His work has been featured in The New York Times, Entrepreneur, Forbes, TIME, Newsweek, Business Insider, MSN, Yahoo Finance, The Los Angeles Times, The San Francisco Chronicle, Hubspot, Ahrefs, Shopify, Investopedia, VICE, Vox, Mashable, ChooseFI, The Penny Hoarder, GoBankingRates, and more.

85 thoughts on “How Does Work?”

    • I’m having trouble understanding one thing. If the minimum purchases is say $30 and my card is worth $50 is that saying that I need to have a bill worth $80 and $30 of that needs to be paid out of pocket?

      • in the app or the website shows the required minimum purchase so when you redeem the specific certificate amount like $10 off when spend $20 , the rest $40 will remain ,you just need to use the code again for another offer.

        • I don’t know if there’s something wrong with the app it’s saying 403 forbidden but I have a Lotta money on this website and I can’t use my certificates what’s going on any info

      • I have a RESTAURANT.COM card for $100.00, and I’m having a difficult time trying to figure out how it actually works. I’ve read thru a lot of comments here and it doesn’t sound like all that good of a deal. Just when I think I’m beginning to think I might know how it functions, I read some more comments and I’m back to square #1.


  1. I hate to say this, but your math is incorrect on that example.
    20+9.80=29.80 (actual out-of pocket-cost)
    Also, theres about a half-dozen other states where gift certificates don’t expire. Do your homework.
    FYI: The tip and tax you pay is on the full amount of the bill, just to clear it up.

  2. Hi Eric, thanks for the comment. Let me clarify the math. On the order amount of $35 (minimum eligible order), tax was 10% or $3.50 and gratuity 18% or $6.30. So $9.80 in tax and tip + the original $35 order brought the total to approx. $45. Less the $25 gift cert leaves us at $20 out of pocket. Plus the $2 cost of the gift cert for a grand total of $22.

    And you’re right about other states where gift certificates don’t expire, just I live in CA and am not familiar with the laws everywhere else.

  3. I been reading about for a while now I decided to try it when I saw on a blog the $25 certif were $2 every place here in Los Angeles,CA require that you pay 15-18% gratuity but I found one that doesn’t and it was so cool I went there with my mom husband and my little boy minimum purchase was $35 and we even had to order large beverages and a cookie to get to $35, and we were sooooo full. And we paid 10+2=12 for a big meal for 3 and a toddler. I loved that deal it was great.

  4. I was searching threw the restaurants in my area and I do not see the fine print as you called it. Where can i find this information so i can make an informed buy?

    • I’m not sure it’s the same for every restaurant, but I checked a couple. If you search by zip code, then click the restaurant’s name, in the upper left there is a blue Purchase a Gift Certificate box with the add-to-cart button. Right below that is a box with the restrictions. For example, the one I’m looking at says “Minimum purchase of $50. Excludes Fri. 20% Gratuity added prior to discount. Valid for Dinner, Food, Dine In ONLY.” Hope that helps.

  5. I’m concerned about Sara’s comment. Apparently she didn’t leave a tip. Always tip on the pre-discounted amount. Non-tippers or lousy tippers are going to ruin this great deal for everyone.

  6. If you want to test out, I have a $25 gift card I’ll send to the next person who leaves a comment. Consider it your bonus for reading this far!

  7. Nick – if you order a $50 gift cert, but only buy $40 in food, do they give you $10 in cash? Or is it the case that you must order more food than the amount of the certificate?

  8. Hi Paul, thanks for stopping by. If you get a $50 gift certificate, you’ll need to spend AT LEAST $50 to be able to redeem it. Most of the time, there will be a minimum purchase requirement above and beyond the amount of the certificate. For example, I’m looking at one restaurant near me with a $50 option, and the minimum purchase is $100.

  9. I tried it to buy for $3 and got $25 gift card. After having great dinner with my friends, I paid $20 with tips. We were very happy.

  10. Ughhhhh I wish I would’ve read this first!!! I just got FIVE $100 gift cards with the intention of giving them away for Christmas gifts but with all this fine print, I don’t think it’ll be worth giving them away. I guess there will be lots of date nights for me and the hubby!

  11. I was a manager for a restaurant that signed up with before my time.
    The restaurant was hoping for new customers, but normally and naturally only the ones that come in will always have a coupon once they know about it. If people can save they would never buy full price ever again. is quite hard to deal with from the restaurant’s end. They will keep the restaurant on their site even after numbers of request to be removed. When they talk to the restaurant they make it sound like a good deal. In reality the restaurant cannot cover the cost for rent/labor.
    If you have a favorite restaurant I encourage asking them about frequent customer rewards rather than supporting these people who work on others’ backs.
    A $100 certificate can be sold on eBay for $8. But a restaurant has to lose the full $100.
    They will convince you that the average table check is one number, but in reality only 1/6 tables to order more than the minimum.
    I understand people like to save, so do restaurants.. they’re there to make a living too.

  12. @Eric

    The math was right. $35 minimum – $25 = $10 what restaurant makes
    The rest between $35 and $45 = tax and tips which goes to the government and server

  13. Fu,
    I understand your points, and agree that may not such a good deal for the restaurant owner. But what are you told by to induce you to sign up? Are advertising and getting new customers the only benefits, i.e., no cash?
    I disagree with your comment that restaurants cannot cover the cost of rent/labor. The fact is you were going to incur those costs anyway, i.e., without additional customers from If nothing else, your wait staff receives greater tips than they would without customers. All things considered, I don’t understand why THOUSANDS of restaurants across the USA would be participating with if it was such a bad deal for them.

  14. Hi Nick,
    I just bought a $500 card (for $30) for because of the great discount from the Today Show’s “Steals & Deals”… but I don’t see how they track and keep reducing the amount I use at each restaurant (in Los Angeles County). I don’t see instructions on either! Hope they come with instructions with the card?! You only describe one card for a certain amount for one restaurant you planned to go to…and I have one card for $500- can’t/won’t spend that at one restaurant! Also, in the directory it says “claim this listing” in red under some of the restaurants I would like to go to- so this concerns me that my card won’t be taken there, right? Please help make this less confusing for me- I appreciate it!

    • Hi Patsy, thanks for the note. It’s my understanding that you can now use your $500 gift card to buy the offers from the participating restaurants. So for example if one restaurant nearby is selling the $25 voucher for $10, you would use your gift card to pay the $10 instead of your credit card. I think that’s how it works… consider it like a credit card you can only use while shopping at — it can’t be used at the restaurants directly — you have to by the vouchers online first. Thanks for stopping by, hope that helps!

  15. so with a $100 GC I could take my fam to a restaurant with a $50 or $70 minimum purchase, order,eat & pay the entire bill with the $100 GC including the tip? that is as long as we do stay under the $100 amount. correct? thnx.

  16. Nick, somehow the first portion of my query got left out, but it was directed @ you.
    so with a $100 GC I could take my fam to a restaurant with a $50 or $70 minimum purchase, order,eat & pay the entire bill with the $100 GC including the tip? that is as long as we do stay under the $100 amount. correct? thnx.

  17. It depends if the gift card is for or the specific restaurant. If it’s to, you have to use it on their website first to buy the vouchers for the participating restaurants. Normally the restaurant conditions have a minimum purchase that is higher than the voucher amount — for example a $25 voucher may carry a $35 minimum purchase requirement.

    But it sounds like you’re describing a gift card, which is not valid at any restaurant– it has to be redeemed on their website first.

  18. i’ll have to more of them. so if i choose a restaurant with a lower minimum than my gc what happens then? and is tip covered or should i still bring cash or my visa? ive never used these cards before and i’d like to walk in to the establishment with the correct info.

  19. won’t sell a voucher with a minimum less than the face value so you don’t have to worry about that. Tax and tip is not included so you’ll need to bring extra for those.

  20. ok, so say we go in have dinner and the total for everything excluding tips was $95 & the restaurants minimum was only $70, I would not have to pay for anything else except tips?

  21. Sorry I’m not being clear. Your gift card is not valid at the restaurant. You have to buy a specific restuarant voucher on the website using your giftcard. These vouchers are typically sold in $25 or $50 values, but carry minimum purchase requirements of $35-100 respectively, excluding tax, tip, and sometimes alcohol. In the post I put some of the common restrictions. You will need to pay the difference between the voucher value and the meal total, plus tax and tip. In my example in the post it was $20…

    I don’t work for, just thought they had an interesting business. For customer service please visit or call 1-800-979-8985

  22. oh, i got that part, just left it out of the question since we covered it already. i do appreciate your time & thanks so much. i hope you & your family have a wonderful Christmas & new year. thanks again.

  23. I also bought the $500 card from Today show (actually I bought 2 for gifts) then I went on-line and really looked it up. Guess I should have done that first, but being unemployed I thought cool, I can afford to eat. There is many laws on gift certificates and I know Groupon’s and Living social are being hit with lawsuits on their use calling theirs “gift cards” How can pass for a gift card they are coupons!
    I am in San Diego and see most as $100 with a minimum of $200 to spend…they all have no happy hour, and weekends and have to buy drinks that do not count towards bill and with an 18% gratuity added. And I read that most restaurants after buying them do not even take them when you bring them to the restaurant.

    I feel really taken! How am I suppose to give “coupons” for gifts.

  24. Okay Nick, so I have a restaurant in mind from that has a mim purchase of $35 and offers certificates of up to $100…does this mean if I go to the restaurant and buy $101 worth of food…my coupon will cover $100 of it and I will be left with a bill of $1 plus tax and gratuity?

  25. I found another $25 gift card. It’s kind of old so I’m not 100% sure it will still work.

    But if you made it this far down the comments you deserve a prize — next commenter wins it, no strings attached! I’ll email you the details.

  26. these coupons are for people who like to dine out. expect to spend at least twice what the coupon in worth. $25 face value pd $5 or $10 for it. with the min. purchase which is always over the coupon,(more the coupon $ more the min.) figure $50. a $50 coupon bill is min $100 + tax and tip, figure around $75 – $80 out of pocket. not a freebee a nice discount for people who like to dine out.

  27. We are going on vacation to the beach and will most likely be having a lot of meals in restaurants- this may be a great way to save $$$ since you can look up the places ahead of time, correct?

  28. We used certificates for quite a while, but the last two placed we visited told us something disturbing. Apparently, at the two different places, when someone uses a certificate, the restaurant keeps the tip and the waitstaff gets nothing! Has anyone else heard of this?

  29. If I got a $100 gift card, to the website, does it redeem only for a $100 voucher, or is it like a way to pay the discount prices.. like say I could buy 10x $25 certificates with it?

  30. For Roy: your gift card can be used to buy multiple certificates totaling up to your gift card amount- in your case, $100. But, look for promo codes and your $100 gets you an even better deal. Regular priced certificates generally cost $10 for a $25 certificate on the website but with a promo code, you may be able to buy the certificates for $5 or less. You would not have to use your entire gift card at one time either. They will keep your total credit on your account until you use it.

    Mike- never heard of a restaurant so rude to their wait staff. Report them to your state labor board. The servers are entitled to their tips.

    All: Be careful when selecting your certificates. Read the restrictions and honor them. Be gracious and thankful.

    We went to dinner tonight on my $25 certificate. Purchased $37 food with tip and tax was $47 on the food. Paid $3 for my certificate. Discount my $50 was $25= 50% off total bill including tax and tip! For me, that’s two meals for 4 of us and I don’t have to cook. YAY for such deals. I love using these as I have found several restaurants which I now LOVE and have returned without the “perk” of a coupon or certificate just because they were so awesome!

  31. I have not used one of these yet.. So if the restrictions do not say “only one certificate”, can we redeem 2 or 3 let’s say 25 dollar gift certificates to cover the minimum needed?… Thanks

  32. I have a $25 GC and I have picked a Pizza restaurant. I can buy a $10 cert for $4. to use at the Pizza restaurant. Restrictions – I must spend $10 Sun-Thurs. I’ll still have my original GC but it will only be worth $21.00.
    If I have all that correct this deal, this time, is great.
    Now how do I get my certificate. Do I have to wait for it in the mail or am I able to print from email?

  33. You can also get free gift certificates from cokerewards, united airlines and other places by redeeming points. NOTE: a $100 gift card in these instances apply to the FACE VALUE of the coupon, not the cost if you paid for coupons — you might buy four $25 coupons for $3 each OR you could cash in a $100 certificate for four $25 coupons. TIP: Some $25 coupons require a $50 minimum purchase, others require only a $35 minimum (a much better deal). The other good value amount is a $15 coupon which requires a $22.50 purchase. Some restaurants automatically calculate the tip at 18%, per the coupon. If they don’t, I usually give a 20% tip if the service is good. We’ve been using these for years, especially when we travel. ALWAYS read the conditions for each coupon before buying.

  34. Following up about some of the other things that have been said on here, you can get certs dirt cheap on sites like eBay. I bought a $500 certificate on eBay today for $16!

    As someone else said, when using an egift card on, you can’t use any of their discounts. So, if I have a $100 gift card, I can use it for a $100 gift certificate. Were I paying with a credit card, I would be able to use a discount code and buy the cert for about $40.

    However, when buying a gift card online for $16-20, that works out to about $1 for every $25 spent, or $4 for every $100 gift card. This is a much better deal than $40 for the same card using a credit card.

    Long story short: check eBay.

  35. Hi, i just got one of those cards & i honestly, dont know how to use it. Is it only certain restaurants that you can use it at? At the top right hand corner it says $25, does that mean thats how much i can spend? If someone can explain to me how it works, that would be nice. If it helps, i live in Austin, Texas.

  36. For a restaurant that has a $15 minimum for a $10 gift card, can I use two $10 card if I’m planning on spending $30 (without tax and gratuity)?

    • That depends on the restaurant. Most restaurants and certificates state that they cannot be combined. Many if not most state they cannot be combined at a table. (ie single table, party of four, 2 separate checks) in this scenario most often 2 certificates could not be used. Sometimes, if prearranged with the establishment, a party of say 19 seated at a single large table may be able to use multiple cert/vouchers for an equal amount of checks. This helps the restaurant attract and accommodate more customers without tying up multiple tables.

  37. Trying to understand how works. So if i buy 50 certificate and its saids minimum purchase of $100. Do i have to make $100 purchase?

  38. You said:

    ” Some I’d heard of and some I’d even eaten at, but most were unfamiliar. I was attracted to Mexxi’s Restaurant and Catering in nearby San Ramon.”

    “…I can’t say whether or not Mexxi’s will make money collecting $10.20 on a $35 check. My guess is they at least break-even or else they wouldn’t be signed up with”

    You basically implied that you had never heard of Mexxi’s prior to registering your eGift Card. Assuming Mexxi’s broke even after your dining experience; they certainly got some inexpensive and direct marketing out of the deal. It sounds like this thing is good for restaurants, after all…

    • No. Because people who use coupons and these “restaurant” cards don’t come back because they want the same deal again.. Just ask the HUNDREDS of businesses that screwed over these “deals”

  39. With a $50 gift card for example. You always have to redeem the gift cards for a certificate, paying atleast a $100 minimum???? You can’t get a gift card voucher for a certain restaurant and subtract $50 from the total???

    • See they have the gift cards. Plus even better, they give you access to 300,000 retailers nationwide where you can save up to 50% off. Only cost $9.95 a month. I just saved $3,000 on buying a car through this site!

  40. I have used for many years and they work. But, I recently found a better way to save. See I pay $9.95 a month and save several hundred dollars a month. Food, travel, rent a cars, hotels, grocery coupons, online shopping, entertainment and more. All i do is show my phone to save at thousands of places locally and over 300,000 across the US.

  41. Hi I have a question, So My sister gave me one of these flimsy gift cards, The card reads $50, Says I have to redeem the code on the back, I wanted to give this card to someone else and was offered $20 for the $50 card is that good or not? And if a meal is $150 in total anf the card is $50 does that mean they take $50 off the card? Mega confused….lol

  42. I’m missing something here. What is the incentive of the restaurant to report to that a gift certificate was used by a customer? Does the restaurant get anything back from

  43. I will try to clarify a couple of things for those who make it this far down the thread.

    1) TIPS:
    As explained in the link above tips are defined as:
    The payment must be made free from compulsion;
    The customer must have the unrestricted right to determine the amount;
    The payment should not be the subject of negotiation or dictated by employer policy; and,
    Generally, the customer has the right to determine who receives the payment.

    Anything not meeting these factors is essentially a Service Charge (regardless of what it’s called ie gratuity) and therefore subject to sales tax, and is not a tip. In fact there is nothing that says a merchant must give any of this to the employees. If any of it is given to the employee it is considered wages and is subject to ALL applicable taxes. If you truly wish to TIP a server, give them cash directly and it becomes their responsibility to report the income. Mandatory Gratuities are nothing more than a way for a merchant to charge you separately to serve you. Certificates: These are essentially $ off coupons. They have no actual cash value, not even refund from unless refused acceptance by merchant, Example You pay $4 for a certificate (coupon) that allows you $10 off a minimum purchase of $25. The restaurant receives none of the $4 you paid. Realistically you get $6 off your minimum $25 purchase which may have additional restrictions, like excluded days, hours, occasions. This amounts to a 25% or less discount on your purchase. The restaurant is out 40%. eGiftcard and Gift cards (actual cards mailed to you)
    These can only be used to buy certificates. In other words prepaying for the right to buy certificates.

    In July this year was sold to a holding company. It is gas received hundreds of complaints from consumers and businesses. If you want to try a new restaurant in your area, try giving them a call. Many of them will gladly give you a discount to come try them out. Some may even give you a coupon to return. This scenario is a win win. The merchant gets a new and possible repeat customer who actually has an interest in their establishment. You get to try a new venue with the feeling your special, Most good business owners who can get a new customer who is actually interested in their business vs just cheap deal will happily make you feel special. If they don’t you probably wouldn’t be happy with any coupon.

    This site is for Hustlers so get Hustle’n!

  44. I believe I have an account for years now. I just haven’t used it in a long time. However, I tried to log in and it won’t allow me to, so I attempted to create a new account and I could not get into the “Create Account” area. So, I tried the forgot password and it also will not allow me to click on it? What is up with your App?


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