Gift Cards' Popularity Rises
by Staff -- Gifts and Dec, 2/22/2007 8:09:00 AM
London — Most consumers have had good experiences with gift cards, a new study says, and plan to buy more. Giftex, a gift card information, analysis and support company, sponsored the study, which found that over 81 percent of participants had good experiences with gift cards.
That positive experience translates to repeat business. More than three quarters of respondents plan to buy gift cards this year: 78.6 percent, compared to 64.9 percent during the 2006 holiday season. And not only are more shoppers buying gift cards, each shopper will buy more cards: respondents expect to buy 36 percent more gift cards in the 2007 holiday season, for an average of 3.74 gift cards each.
What this means for retailers who sell gift cards is a continuing shift of revenue from fourth quarter, when Christmas gifts are sold, to first quarter when most cards are redeemed and the money from most cards actually hits the books. This, in turn, also impacts post-Christmas merchandising and sales, so that shoppers coming in to redeem their cards will find product they want at, hopefully, full price. What it means for retailers who don’t sell gift cards is a continuing erosion of market share in favor of those who do. For more on gift cards, see Paper or Plastic?.
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