Shoppers price-conscious mentality is taking a toll on the seasons most-requested present: gift cards. National Retail Federation's sixth annual Gift Card Survey found that gift card sales will fall nearly 6% 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 NRFs 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, VP 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.”