Cautious consumers may opt for discounted gifts, experts say
Gift cards have gained popularity over the years, becoming an ideal fallback present to give to hard-to-shop-for family members, friends and co-workers.
But this year, with retailers expected to slash prices and dish out discounts throughout the holiday shopping season, gift card sales might suffer, because retailers can’t sell a gift card for cheaper than it’s worth.
“Some price-conscious shoppers will be passing up gift cards in favor of holiday bargains,” said Tracy Mullin, president of the National Retail Federation. “Retailers might need to make minor adjustments to holiday plans as few people might be hitting stores in January to redeem gift cards.”
With those consumer factors, gift card sales are expected to slip nearly 6 percent this holiday season to $24.9 billion, down from $26.3 billion last year, according to the NRF.
Gift cards remain the most-requested gift this year, with 55 percent of consumers saying they would like to receive one this year. But fewer people are expected to purchase gift cards this year (53.5 percent from 56.6 percent), and they’re expected to spend less on gift cards ($147.33 from $156.24), according to the NRF.
Another factor that could slow gift card purchases is the fear consumers might have that a retailer could go out of business or file for bankruptcy protection before the gift card is redeemed, leaving the consumer with nothing.
Several billion dollars of gift cards go unused every year, and with retailers like Circuit City and Sharper Image declaring bankruptcy this year, consumers might opt for an actual gift, or another reliable fallback, cash.
One store is offering gift card-holding consumers more choices this holiday season.
Specialty retailer company Brookstone is allowing shoppers to exchange any gift card from another retailer for a Brookstone discount of 15 percent off. The gift cards can be for any amount but are valid for in-store purchases only.
“Brookstone recognizes that this year more than ever, holiday shoppers need to make every dollar count,” Brookstone Chief Executive Officer Lou Mancini said in a statement.
