QSR marketing to Gen Z is tricky.
They don't have a usual lunch spot the way older generations did. They bounce around depending on their mood, depending on what’s “cool” according to TikTok. And increasingly, they’re making decisions about where to eat based on their budget.
According to Toast, 30% of consumers under 27 started eating from more budget-friendly restaurants.
Below, we share what we know about Gen Z restaurant spending habits based on $70B worth of transactions, and what that means for your QSR marketing playbook (hint: you might want to consider cash back).
What Transaction Data Shows About QSR Spend Among Young Diners
They Spend During the Week
Conventional wisdom says weekends are when people eat out, but that’s not what we saw.
QSR weekday spend was 28% higher than weekend spend among younger cardholders.
A lot of Gen Z and Millennials work hybrid or remote, and some are still in school, which forces them to squeeze lunch into a short break between calls or classes. Grab-and-go, easy to consume, tasty food is a welcome and convenient treat.
What this means: QSR brands would benefit from day-specific promotions and rewards-based offers to encourage consumers to buy online or in-store. They may also want to adjust when these ads are shown — ideally on Sunday or Monday to drive purchases during the week.
They Spend Year-Round
For how much brands spend on ads in Q4, you’d think a bulk of the buying happened during the holiday season. While that is true for some categories, not so for QSR.
In fact, winter months tend to have the lowest spend. There’s an uptick during the summer (14.7% up from winter) and an even bigger jump in the fall (23.2% up from winter).
What this means: Don’t waste your time and budget on super expensive holiday ads. Focus your attention and money on pay-for-performance brand awareness strategies, like rewards-based marketing, particularly during slow seasons, like spring and winter. That way, people think of their brand when they’re ready to spend when summer hits and when they (or their kids) go back to school. Plus, a 2 to 3% cash back might be the nudge people need to dine out.
They Spend Frequently
QSR carries one of the lowest average order values in the dataset. But, it’s also the fourth-highest category by share of total spend.
This low ticket, high frequency pattern is why cash back and promos work so well in this category.
What this means: Use your discounts. Even a not-so-big offer on a $12-15 lunch is a steal. And the more you can get people to come back, and the more you can deliver a great meal, the more you can win them over for future lunches (and dinners, and snacks).
What Gen Z Wants From a QSR Brand
Young consumers are loyal to brands that save them time, make them feel valued, and fit into busy lives.
Great Service
To win over Gen Z, you have to meet them where they are. Whereas the average consumer is willing to pay a 5% premium for convenience, 21% of consumers aged 25 - 34 would pay a lot more: 9%+.
For them, convenience means:
- Partnering with delivery apps. In our dataset, transportation and delivery was the 6th highest vertical share (7%).
- Low fees. 45% of Millennial and Gen Z consumers are compelled to go to restaurants with lower or no fees/service charges.
- Offering pickup. They want flexibility, especially when times are tough. 48% of consumers have been more likely to pick their restaurant orders up themselves rather than have them delivered due to inflation. Having both pickup and delivery options available can help you meet the needs of all the consumers in your TAM.
- Accepting multiple payment methods. 16% of consumers under 27 want more ways to order when dining in (via kiosk or QR code) and 9% of them want a faster way to pay. And 77% of younger consumers are more likely to trust businesses that offer their preferred payment methods.
Great Food
26% of consumers ages 27 and below are most compelled by higher-quality menu items to eat out more often. If you can make a menu item go viral on TikTok or get your restaurant thousands of 5-star reviews, Gen Z is bound to try it out at some point.
Great Discounts
In Reach3’s State of QSR study, 80% of Gen Z said fast food prices have gone up.
Yet Gen Z is still showing up. 51% are visiting QSRs more often than they were a year ago, and just as many are spending more than they used to.
If you hit them with the right discount at the right time and knock their dining experience out of the park, you’ve probably got a loyal customer.
Where the Traditional QSR Playbook Falls Apart
Many popular QSR brands have defaulted to apps. But people often download the app for one deal, then never open it again. All that built-up value just sits there, unused. App perks, push alerts, and rewards emails land on people who already downloaded the app and opted in. The diner sitting in a competitor's drive-thru, with no relationship to your brand, never sees any of it.
It's not that people don't want loyalty programs — 41% say they're influential in where they eat, and 49% participate in a QSR loyalty program versus 34% for full-service restaurants.
The problem here is that asking every new customer to download an app, sign up, and remember to use it just doesn’t scale. McDonald’s (which has, arguably, the most successful app in the QSR category) runs at a size most brands can't come close to matching in terms of budget or resources.
And that doesn’t even account for how expensive paid ads are becoming.
Why Cash Back Outperforms Traditional QSR Promos
If you’re not familiar, a card-linked cash back offer is a merchant-funded reward tied to a customer's credit or debit card. When they pay at your restaurant, the reward posts to their account a few days later. No coupon to clip, no code to remember.
But that convenience isn’t the only pro:
They Show Up Where Diners Are (Not In An Annoying Way)
Tech savvy Gen Z and Millennial audiences are historically extremely difficult to get in front of. They’re immune to traditional ads, X-ing out or scrolling past them. Even opening new tabs in incognito to limit the number of ads they get.
Card-linked offers don’t feel like a traditional ad.
They appear in a trusted environment (banking app, which Gen Z consistently uses) and they feel more like a free discount or coupon than your everyday brand promotion. They show up at a time when that audience is thinking about money.
And most Americans tend to spend on their credit and debit cards on eating out: 37% of restaurant customers paid for their most recent restaurant purchase with debit cards and 33% paid with credit cards.
They Give You First-Party Data
A rewards-based ad platform, on the other hand, can tell you where else your customers like to eat and shop, what they typically spend, and when they spend the most. And that data can help you personalize rewards, with item-specific rewards, location offers, category discounts, and even “offer boosts” to push consumers toward making a purchase.
They Create Habits (and Drive Urgency)
A flat cash back rate gets people to try you once, but tiered offers build a habit. Here are three types that work well for QSR:
- Purchase count offers: A user receives a reward after a specific number of purchases from a brand within a given timeframe. Just like a punch card.
- Progressive offers: A user receives a higher reward for each additional purchase (2% cash back on the first purchase, 4% cash back on the second purchase, 6% cash back on the third purchase).
- Tap-to-renew offers: After making a purchase and receiving a reward, a user can extend the offer to their next purchase, leading to more card activity for the issuer and repeat business for the brand.
The best cash back offer platforms let you run rewards that create urgency, too, like “flash” offers that users can only redeem during a certain period of time or “while supplies last” offers for special menu items.
They Make Attribution Easy
Unlike other marketing channels that make attribution really difficult, cash back rewards are tied to real transactions.
And in a rewards demand platform, you can determine whether your offer influenced purchasing behavior (or would’ve happened anyway). In our incremental lift studies, for example, we:
- Create statistically equivalent groups: Divide your audience into test (80%), control (10%), and reserve (10%) segments
- Expose only the test group to your offers: The control group receives no marketing intervention
- Measure the difference in outcomes: Compare key metrics between groups to reveal the true incremental impact
Plus, you’re not ever paying for impressions, only when people actually buy a meal.
How QSR Brands Are Using Cash Back
Fazoli’s, the fast-casual Italian chain, reached out to Kard, hoping their partnership could:
- Reel in a younger audience and keep them loyal customers for life.
- Drive more, higher order value purchases among their existing customers.
- Tap into their lapsed customer base, giving them a reason to come back to their neighborhood Fazoli’s.
We came up with a 4% cash back offer, redeemable both online and in-store with the swipe of a card (no coupon to activate or code to remember). That alone drove over 6,000 offer redemptions per week — and 81% of those redemptions from brand-new customers.
That cost-per-acquisition story is nearly impossible to reproduce on Meta or Google for a regional chain.
They’re not the only restaurant that’s seen similar results with card-linked offers.
Cicis Pizza ran cash back to attract new diners and reactivate lapsed ones, and saw 72% of redemptions from first-time guests, with an $11:1 return on ad spend. Plus, the Cicis Kard campaign also encouraged existing guests to return more often. 28% offer redemptions came from existing and lapsed customers over the course of the campaign.
Build Your Loyalty Engine
Ready to start setting your restaurant brand apart? Give Gen Z the deals they want in the apps they already use with Kard’s rewards demand platform.
Reach out to our team to see what cash back rewards can do for your acquisition (and retention numbers) or explore our case studies to get a sense of what other similar brands have already accomplished.
