A not-so-simple gift
They don’t offend. They’re easy to pick out. And people love to get them.
Gift cards have mushroomed into the most requested holiday gift by consumers. Nearly 55 percent of people want to receive a gift card this year, according to the National Retail Federation.
But the troubled economy is likely going to affect the way you and other consumers spend on gift cards. And there are more precautions you should take when buying one this year.
If you do get a gift card, it might not be for as much as it was in the past. Cash-strapped consumers dealing with falling home values, declining credit lines and rising food costs are spending less on gifts. So your mom might give you a $50 gift card instead of $100 like last year.
You’re also probably going to buy and ask for more practical gift cards – say, for gas or a grocery store, as opposed to your favorite clothing store like Banana Republic or Arden B. Consumers who get gift cards are also more likely this year to choose to spend them on necessities. Your mom might use the Wal-Mart or Target card you get her to buy dish detergent and trash bags, and not the perfume or sweaters you might have had in mind.
Many of you are more likely this year to forgo gift cards altogether and instead buy cheap gifts from the tons of bargain racks that are expected at stores this holiday season. Why get a $20 gift card when you can buy a $10 sweater?
“Gift cards don’t go on sale,” Ellen Davis, a spokeswoman for the NRF, said on a recent conference call. “For budget-conscious consumers they’re not as attractive as they once were.”
The retail group expects spending on gift cards to fall 5.6 percent this year because of the economy, even as the popularity and demand for the cards grows. Archstone Consulting expects shoppers will spend $25 billion on gift cards, down 25 percent from 2007.
