A tale of two seasons

The advent of gift cards, and their subsequent rise in popularity, created a sort of dual holiday season which had a lot of benefits for retailers. Gift card sales provided a valuable indicator of post-Christmas sales, which also were likely to take place at higher margins, as gift card recipients are less price sensitive.

It doesn’t appear that scenario will play out to the same degree as in previous years as new data from NRF suggests gift card sales are expected to declined 6% this holiday season to roughly $24.9 billion from $26.3 billion last year. The number of people planning to purchase gift cards is also expected to decline to 53.5% compared to 56.6%.

“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.”

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%).

The survey polled 8,758 consumers from Nov. 5 to 11.