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Gift card spending drops as budget-focused holiday shoppers look for bargains


November 18, 2008
By National Retail Federation

Nov. 18, 2008 – Shoppers’
price-conscious mentality is taking a toll on the season’s
most-requested present: gift cards. NRF’s sixth annual U.S. Gift Card
Survey, conducted by BIGresearch, found that gift card sales will fall
nearly six per cent this holiday season to $24.9 billion, down from
$26.3 billion last year.

Shoppers’ price-conscious
mentality is taking a toll on the season’s
most-requested present: gift cards. NRF’s sixth annual U.S. Gift Card
Survey, conducted by BIGresearch, found that gift card sales will fall
nearly six per cent this holiday season to $24.9 billion, down from
$26.3 billion last year. Fewer people plan to purchase gift cards this
year (53.5% vs. 56.6% last year) and gift card shoppers will be
spending less overall on the cards ($147.33 vs. $156.24 in 2007).
 
“Since gift cards never go on sale, some price-conscious shoppers will
be passing up gift cards in favor of holiday bargains," said NRF
President and CEO Tracy Mullin. “Retailers may need to make minor
adjustments to holiday plans as fewer people may be hitting the stores
in January to redeem gift cards.”
 
The survey found that the biggest gift card spenders this year will be
men, who will spend an average of $156.98 on the cards, and Americans
over age 45, who will spend $168.02.
 
Preliminary gift card research conducted for NRF by BIGresearch found
that the main reason shoppers plan to buy fewer gift cards this holiday
season was because they feel the cards are impersonal (22.7%), that
they would rather stretch their dollar by buying merchandise on sale
(10.9%), and because they do not want to buy a card with expiration
dates or added fees (9.8%). Other shoppers say they simply do not know
which gift card a person would want (7.7%), while a small number of
people say that they are worried the gift recipient will lose it (3.9%)
or that the retailer will go out of business (3.1%).
 
Though gift card spending is expected to decrease, more people than
ever will be asking for the cards this holiday season. According to
NRF’s first holiday spending survey, released last month, 54.9 percent
of consumers would like to receive a gift card this holiday season, up
slightly from 53.8 percent last year. Gift cards will be the most
requested gift this year, followed by books, CDs, DVDs, videos or video
games (50.0%) and clothing or accessories (49.8%).
 
“Most consumers have been holding back on spending for themselves all
year long and would love nothing more than receiving a gift card that
would let them buy whatever they want,” said Phil Rist, Vice President
of Strategy for BIGresearch. “Being able to walk through a store and
select their own present would be a gift in and of itself for many
Americans.”

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