Nov 19, 2008

Poll: Holiday gift cards losing their allureBy Patricia KitchenNewsday.com

The ever-popular gift card – a seemingly surefire present that leaves the shopping and decision-making to the recipient – has lost some of its holiday magic as shoppers cut back on spending and grow more wary of fees and expiration dates, according to the National Retail Federation.

Gift-card sales are expected to decline this year by 5.6 percent, according to a poll of 8,117 consumers conducted Nov. 5-11 by BIGresearch.

Still, gift cards will account for about $25 billion in sales, said Ellen Davis, vice president of the Washington, D.C.-based National Retail Federation.

Last year may have been “the peak in use of gift cards,” said Jay Scansaroli, senior retail partner with Deloitte Llp, a Manhattan-based financial services firm. This year, shoppers say they expect to buy an average of 5.3 cards, down from 5.5 last year, and spend an average of $28.43 per card, down from $36.18 last year. That’s according to Deloitte’s 23rd Annual Holiday Survey of 13,276 consumers conducted Sept. 26 to Oct. 7.

Besides tightening their budgets, shoppers are increasingly aware that tough economic times could lead to more retail bankruptcies – not a plus for gift card holders, Scansaroli said. In such cases, retailers may still honor gift cards, possibly at a decreased value, but consumers could face fewer shopping outlets and picked-over merchandise. Among the stores that have filed bankruptcy this year – Sharper Image, Circuit City and Linens ‘N Things.

He also said that shoppers are aware that people are just “over-carded.” The survey found consumers saying they have on average 5.9 unused cards, compared with 3.7 last year. And 14 percent said it’s unlikely they will ever redeem them all.

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