Gift Card Sales Expected to Hit All-time High

WASHINGTON -- Retailers can expect a flurry of gift card sales this holiday season, according to the National Retail Federation (NRF). Its Gift Card Survey, conducted by BIGresearch, found that sales of gift cards will top $24.81 billion, a $6 billion increase over the 2005 holiday season. Retailers can also smile about the fact that consumers will be spending more than last year on cards, an estimated $116.51 each, up from the $88.03 recorded in 2005.

"The popularity of gift cards has increased at a remarkable rate," said Tracy Mullin, NRF president and CEO. "Consumers love gift cards because they take the guessing out of holiday shopping and retailers love them because they are easy to stock and take up minimum shelf space."

The survey found that 79.7 percent of consumers plan on purchasing at least one gift card this season, and 52.8 percent said they would like to receive a gift card this year. The NRF study confirms earlier predictions reported on CSNews Online by Deloitte & Touche USA that found 66 percent of consumers surveyed plan to buy gift cards this year, and that the number of cards will increase from 3.9 cards to 4.6 cards per consumer.

"Gift cards have taken a lot of the stress out of holiday shopping, making them a favorite among people of all ages," said Phil Rist, vice president of strategy for BIGresearch. "Whether they are a stand-alone gift or an addition to a gift basket, gift cards please even the most fickle people on holiday shopping lists."

The NRF noted that most retailers do not count the gift card as a purchase at the time of sale; rather, they wait until the gift card is redeemed and merchandise is purchased. Because of this, some of the $24.81 billion spent on the cards will not be seen until after the holiday season.

The NRF also gave consumers some advice for gift-card giving. It stated that consumers should "shop smart" for cards, and only trust reputable sources for cards. It discouraged the use of online gift card sites, where the cards might be counterfeit or obtained through illegal means.

It added that some retailers recommend that recipients register the gift cards received at the store's Web site. This allows consumers to check the balance online or receive a new card if it is lost or stolen.

The NRF's Holiday Consumer Intentions and Actions Survey measures consumer behavior and shopping trends during the winter holidays. The survey polled 8,090 consumers and was conducted for the NRF by BIGresearch from Nov. 1 to Nov. 8.

The NRF is the world's largest retail trade association, with membership in all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores. As the industry group, NRF also represents more than 100 state, national and international retail associations.
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