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The National Retail Federation (NRF) expects gift card sales will fall nearly 6 percent this holiday season to $24.9 billion, down from $26.3 billion last year, based on the results of its sixth annual Gift Card Survey, conducted by BigResearch.
The survey found 53.5 percent of people plan to purchase gift cards this year vs. 56.6 percent last year. Those who do intend to buy cards said they plan to spend less overall; the average dollar amount is expected to be $147.33, down from $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 said they will spend an average of $156.98 on the cards, and Americans over age 45, who will spend $168.02.
Among the reasons cited by shoppers as to why they plan to spend less on gift cards:
22.7 percent said they feel the cards are impersonal;
10.9 percent said they would rather stretch their dollar buy buying merchandise on sale;
9.8 percent said they didn't want to buy a card with expiration dates or added fees;
7.7 percent said they did not know which gift card a person would want;
3.9 percent worried the recipient might lose the card; and
3.1 percent worried that the retailer would go out of business.
Despite the expected decrease in spending, NRF does expect more people will be asking for gift cards this season. The group's first holiday spending survey released last month found 54.9 percent of consumers hoped to receive a gift card this year, up from 53.8 percent last year. That survey found gift cards to be the most-requested item, followed by books, CDs, DVDs, videos or video games (50 percent) and clothing or accessories (49.8 percent).
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.