Gift Card Spending Surpassed Expectations as Last-Minute Shoppers Looked
for Quick, Easy Gifts --Most Consumers Have Spent Less Than Half of Card Values--
Almost Half of Recipients Use Cards within a Month and Spend More Than Card’s Value
Washington, DC, January 23, 2007 - Though the holiday season officially
ended several weeks ago, retailers continue to see consumers hitting the
stores to spend gift cards. According to an NRF survey, conducted by
BIGresearch, consumers have plenty left to spend: shoppers said they had
spent less than half of the value of their gift cards (37.3% on average)
by the second week in January.
Because retailers are not able to count a gift card as a sale until the
card is redeemed, companies are encouraging consumers to spend gift
cards as soon as possible. Retailers also know that customers redeeming
gift cards are likely to spend more than the value of the card.
According to the survey, half of shoppers (50.9%) who have redeemed
holiday gift cards said they spent additional money beyond the value of
the card to purchase an item.
"January and February tend to be slow months for shopping, so retailers
will be doing everything possible to bring customers into the stores to
spend holiday gift cards," said NRF President and CEO Tracy Mullin. "It
is in the retailers' best interest to encourage recipients to spend gift
cards before they become lost or misplaced."
Though gift cards were expected to be a common holiday gift, they were
even more popular than projected. According to the survey, consumers
spent an average of $164.81 on gift cards, up from the $146.20 they
expected to spend. As a result, gift card spending during the holidays
was $27.8 billion, higher than the $24.8 billion initially estimated by
NRF. Men spent the most on gift cards ($176.84) while young adults 18-24
spent the least ($118.12).
According to the survey, gift cards to a department store were the most
popular to give, as 37.9 percent of consumers said they gave a gift card
from that type of store. Restaurants (26.8%) were also a popular choice,
in addition to bookstores (18.0%), electronics stores (16.2%) and
discounters (14.8%).
While shoppers can easily purchase gift cards at a variety of locations,
most consumers (76.7%) chose to buy gift cards from stores where the
card could be used. However, many shoppers (17.3%) purchased store gift
cards from other retailers, like convenience stores and supermarkets.
Also, nearly one-fifth (17.7%) of consumers said they purchased a gift
card online.
"As gift cards increase in popularity, retailers are looking for more
convenient ways to sell them," said Phil Rist, Vice President of
Strategy at BIGresearch. "Many time-strapped holiday shoppers chose to
buy several different gift cards at once by purchasing gift cards at
supermarkets or convenience stores, which is a trend we expect to
continue."
The National Retail Federation is the world's largest retail trade
association, with membership that comprises all retail formats and
channels of distribution including department, specialty, discount,
catalog, Internet, independent stores, chain restaurants, drug stores
and grocery stores as well as the industry's key trading partners of
retail goods and services. NRF represents an industry with more than 1.6
million U.S. retail establishments, more than 24 million employees -
about one in five American workers - and 2006 sales of $4.7 trillion. As
the industry umbrella group, NRF also represents more than 100 state,
national and international retail associations.
www.nrf.com.
