Gift cards set for holiday season comeback
Bangalore – Gift cards are poised to make a comeback this holiday season, after falling off most shopping lists last year, as retailers and other card purveyors entice U.S. shoppers with freebies and lower fees.
The gift can be an effective source of retailer revenue following the holiday season, as consumers who redeem their cards typically spend more than the value of the card, Stacy Janiak, vice chairman and U.S. retail leader for Deloitte LLP said.
“They have also played a role as a promotional tool, helping to incentivize consumers to shop at a certain store.”
The holiday gift fell out of favor last year as recession-weary consumers preferred to take advantage of massive markdowns on actual products, and concerns that retailer bankruptcies would make cards bought at those stores worthless. Shoppers spent an estimated $24.9 billion on gift cards during the holidays in 2008 — with $40 as the average value of a card — a fall from the $26.3 billion spent in 2007, according to the National Retail Federation (NRF).
But now that retailers have pared inventories and are likely to offer smaller discounts this year, gift cards are expected to be a popular item again on holiday shopping lists.
Janiak said she expects more consumer-friendly terms on gift cards from retailers and card companies this year.
As per an NRF survey, 10 percent of the U.S. shoppers polled said they bought fewer gift cards last year because they were concerned about card expiration or added fees.
