Video Update: Record Year for Gift Card Sales

By: Jodi Baker Email
By: Jodi Baker Email

Six out of every 10 holiday shoppers plans to buy gift cards this year, and they're on track to set a record according to the National Retail Federation.

"Fewer and fewer of them actually have expiration dates now, which is a new trend as well and that's really important for a lot of people buying them," said Mike Breazeale, Assistant Professor of Marketing at U.N.O.

Amazon is the best-selling gift card so far for 2012. But Breazeale added, "Department store cards are a big trend this year, too. A lot more people than ever before are giving specific department store cards. also really bigger restaurant cards, because it's like giving people a night out."

For Jean Stahmer of Omaha, gift cards are a go-to. "That's what they want. It fits. It's the right color," she laughed.

Gift cards, though, have had a stigma attached. Many have been hesitant to buy them for fear they're too impersonal. That is changing, said Breazeale.

"They're so available to so many places, that where you pick the gift card from is a way of showing them you thought about them and care enough to find something [that suits them.]"

More than half of gift card buyers pay more than a card is even worth, according to a recent online survey. For instance, an American Express gift card costs $3.95 in addition to the value of the card. For the convenience of a Visa gift card, the fee is $5.95.

"The other half of people who don't spend more tend to leave a balance on a gift card that they never spend," said Breazeale. "So that's free money to the merchant."

But, he pointed out, the money can be donated to charity. And there are websites like PlasticJungle.com, where gift cards can be sold for most of what they're worth.

"Oh, I don't think I would sell them," said Stahmer. "They're given as a gift to you. No." That mentality may be one reason that the average U.S. household has $300 in unused gift cards.

Brazeale pointed to a recent survey, showing while 60% of consumers plan to buy a gift card this holiday season, only 40% claim to want gift cards. "You have to wonder about that 20%," he said.

Still, whether giving or receiving, the gift card trend shows no signs of slowing down. "We don't have to take it back," said Jan Alexander of Omaha. "That's the best thing."


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