Your Merch Could Be a Marketing Goldmine. Stop Treating It Like a Cash Grab.

I love merch.

A T-shirt from a cool bar in Key West. A hoodie from that hilarious restaurant in Austin. A baseball cap from that music venue in New York. I’ve been to all of those places. They sold all of those things. I loved the food, loved the experience, had a great time — and didn’t buy a single piece of merch. That’s right. I didn’t buy. It’s not that I didn’t want the shirt or hoodie or cap. I did. It’s that, after spending $100 on dinner or drinks, I really didn’t want to fork over another $80 for a hoodie.

Why do businesses do this? Why do they charge so much for their merch?

Of course there’s a cost. But it’s really not that much. I looked it up. You can too. There are plenty of companies online that sell corporate merchandise you can customize with your logo. And when you investigate, you’ll find that things like caps, hats, hoodies, glasses, mugs, golf shirts and T-shirts can cost anywhere from $5 to $15 per item. Yes, there are minimum orders. Yes, nicer materials and more elaborate designs cost more. But the basic merchandise itself isn’t particularly expensive. And yet the restaurant or bar selling these items with its logo will often charge you $25, $50, $60 — or even $80. Yes, that hilarious restaurant wanted $80 for a hoodie with its logo on it.

Is this really such a big profit generator? How many pieces of merchandise does a typical restaurant sell in a week? There never seems to be a huge demand. In fact, whenever I’ve finally broken down and bought something, the person behind the counter freezes like a deer in the headlights. “You want…what?” Or, “Hold on. Let me get the manager.” Or, “Uh…I think we may still have one or two in the back.” I don’t see a line of people waiting to buy this stuff. Are the profits really worth it?

And here’s the bigger problem: today’s customers are already feeling nickele- and-dimed when they eat out. They get penalized for using a credit card. They get turned away unless they meet a minimum purchase. They’re told to “wait until their full party arrives.” They get hit with forced gratuities, “health and wellness” charges, “sharing” charges, processing fees, delivery fees, cancellation fees and cake-cutting fees. And now you’re going to charge me $80 for a hoodie with your logo on it? To advertise your restaurant? C’mon.

A good restaurant or bar should make money from its food and drinks — not a T-shirt. And yet, people really do love good merch. It reminds them of happy times and places. It makes me smile when I stumble across that baseball cap I bought at a fun dive bar in Key West. I still get a little nostalgic whenever I use that coffee cup from that diner in Vegas. I get it. Merch is a fun souvenir.

I don’t want to discourage the practice. If you own a restaurant, bar or frankly any business with a following, you should absolutely have merch. But instead of overcharging customers for it—and potentially spoiling the good vibes they felt about your business — think about using merch differently.

For example, instead of putting all the profits in your pocket, how about sharing them with a charity? That customer who is grumbling about paying $80 for a hoodie might feel a little differently if they know their purchase is helping a good cause. They get a cool hoodie. They’re supporting a charity. And, in your own little way, so are you. And don’t be shy about promoting it. Accumulate the profits and present a giant check to the charity with a local photographer there. Turn the merch into a feel-good story. You don’t even have to lose money. Just share the profits.

Not so charitable? Fine. Use your merch as giveaways. Hold bingo nights. Quizzo nights. Foosball tournaments. Online contests. Give away a T-shirt or hat as a prize. Suddenly, that piece of merchandise isn’t just something sitting on a shelf. It’s part of the experience.

And speaking of online, use it for social media. How about a free drink for the person who posts a picture of themselves wearing your shirt? Or a free entrée for the person who posts a picture of themselves wearing your shirt from the farthest location possible? An extra side of fries for anything overseas.

You have recurring customers. Maybe you think, “Why give them anything extra? They’re already coming back.” Okay. How about a thank-you? A simple “We appreciate you.” You’ve got loyalty programs. You’re tracking your biggest and most frequent customers — and if you’re not, that’s another conversation. So reward them. Same goes for big checks. Party of five? $300 spend? $500? Throw in a piece of merch as a thank-you.

Or maybe, just maybe, sell it for a buck or two above cost. A T-shirt with a cool logo from the bar where you had a fantastic night, for $15? Sign me up. And I bet you’ll sell a lot more of them than you would at $50 or $80. People walk away thinking they got a deal. They did. And now they’re walking around town wearing your logo.

That’s the real value of merch.

Merch can be great for your business. But don’t abuse it. If you do it right, merch can help you make money, reward your customers, generate goodwill, create social content and spread your brand. But don’t do it off the backs of your customers. Use it to reward them. Use it to make them smile. Use it to grow your business.