bake - May 2013 - 12

management

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Red Envelope
Specials
For the notoriously slow months of the year, special promo-

says. “Lots of single donuts, single cookies, cakes — it really

tions are almost always worth the time and effort, even with the

wasn’t that complicated.”

low return rates that retail bakery owners have come to expect.
But one speciﬁc type of promotion, the so-called “red envelope

Cookie Cards in Palatine, IL, gave the red envelope a try for the

special,” has proved to be an incredibly successful pick-me-up,

ﬁrst time during the 2011 holiday season after they heard about

especially during periods when business becomes sluggish.

the idea at a baking show earlier that year. Kerri Callahan,
creative director for Cookie Cards, also chose to keep the

About four years ago Larry Merritt, of Merritt’s Bakery in Tulsa,

prizes simple and product-related. “We did a wedding cake for

OK, was having dinner with his wife at a local Mexican restau-

this year’s big prize, which can be quite expensive,” Callahan

rant when the idea struck him. The restaurant was handing

says. “That was a $750 prize, but I wasn’t putting any money

out a sealed green envelope to each table of patrons with

out for it. The nice thing for us is that this promotion costs

instructions to save and not open it, and to bring the envelope

the amount of money in envelopes and little pieces of paper.”

back to the restaurant in roughly a month’s time. When the

Callahan estimated this amount to be just $50.

customer returns with the envelope during the determined
“envelope opening” period, the envelope is opened to reveal a

For the 2011 and 2012 holiday seasons, Cookie Cards began

guaranteed prize.

offering the envelopes after Thanksgiving up until Christmas
Day, and asked customers to return them anytime after Jan. 1

“They were giving away an appetizer or a dessert, dinners,

and before the end of April. Callahan says one prize has guar-

complimentary stuff,” Merritt says. “I was sitting, eating with my

anteed a returning customer each month: free cookies for a

wife, and I thought, ‘This’d be real interesting. Do it in a bakery,

year. “The woman who won that last year — she lights up every

give anything away from an entire cake to a few cookies. Then I

time she comes in,” Callahan says. “When she comes in to get

kinda forgot about it.”

her dozen cookies, she buys other stuff every time. When we
started the promotion we were a boutique cookie bakery, and

A few months later Merritt, former president of Retail Bakers

we’ve added cakes, cake pops, parfaits and things of the sort,

of America and co-founder of RPIA, was asked by a group

so she’s deﬁnitely adding more every single time she comes in.”

to give a talk about various promotional ideas. While looking
for materials to present, Merritt suddenly remembered the

The smallest prize Cookie Cards offers during its red envelope

green envelope idea. He presented the idea, with the same

special is a free decorated cookie. Other prizes include 10% and

key factors aside from red envelopes instead of green, before

20% off an entire order and a free birthday cake, which serves

trying it out himself. “A bunch of people went out and tried it

8-10 people, for ten years.

and came back saying, ‘We’re having 30% and 40% return rate
results,’ which is just unheard of,” Merritt says. “Most of the time

This kind of promotion works best as a bolster to months that

it’s 5-10% max, but people were getting anywhere from 15%

see slumping sales. “January and July are really slow months,”

to 40%. So I tried it out and I had around a 30% return. I gave

Merritt says. “There’s the heat in July, and they just want

out 5000 envelopes and 30% came back — which came out to

to sleep by the time Christmas is over.” The special doesn’t

something like a 20% increase in sales.”

require a lot of preparation aside from the envelopes and prize
slips themselves, and it guarantees a number of returning

Merritt says some bakers were giving away huge prizes like

customers, many of whom tend to purchase other items in

iPhones and iPads, but he chose to keep his prizes bakery-

addition to their speciﬁc prizes.

related. “I gave away $100 and $500 gift certiﬁcates,” Merritt

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