Gift-card sales rise after falling for two years
The gift card is back.
For the first time since the economic downturn began, sales of gift cards are slated to rise this holiday season amid a broader resurgence in consumer spending. That is expected to help make the week after Christmas particularly lucrative for retailers as shoppers return to the malls to redeem their cards.
According to the TowerGroup research firm, sales totals for the cards will rise nearly 5 percent, to $91 billion, this year after falling for the past two years. Typically, more than half of the cards are redeemed in the month after Christmas. The firm predicts that the industry will hit the $100 billion mark by 2012.
The gains are being driven by consumers’ growing confidence in the economy and the retail industry, which suffered several high-profile bankruptcies in the wake of the recession. In addition, federal consumer protections on the cards that took effect this year may be helping to ease shoppers’ minds.
“We’re not at ‘Happy days are here again,’ but things are certainly better,” said Brian Riley, a senior research director at TowerGroup.
