Hoping for a gift card this holiday season? You may be out of luck, as new surveys show that gift cards are falling out of favor with shoppers.
Gift card sales are expected to fall 6%, to $24.9 billion, this holiday season according to the National Retail Federation’s sixth annual Gift Card Survey, conducted by BIGresearch. That’s down from $26.3 billion last holiday season.
A smaller percentage of the 8,000 consumers surveyed between Nov. 5 and Nov. 11 said they plan to purchase gift cards this year (53.5% vs. 56.6% last year), and gift card shoppers say they will be spending less overall on the cards ($147.33 vs. $156.24 in 2007).
“This year consumers are on a budget, and this year they are serious when they say they will shop around and find a deal,” said Ellen Davis, vice president of NRF, during a conference call with reporters Tuesday.
Pam Goodfellow, a senior analyst with BIGresearch, echoed what Davis and NRF are hearing from consumers: Last year, consumers were willing to go slightly over their budgets during the holiday season, put gifts on credit cards, and worry about the consequences six months later. But now, she says, consumers are shifting from credit card usage to cash and debit card purchases.
“Consumers are worried about jobs, worried about fnances, worried about what’s going on overseas, and it’s making them less likely to spend,” Goodfellow said. “We’re dealing with smarter consumers now, and they are looking to stretch their dollar” by spending less on marked down merchandise.
Meanwhile, Deloitte’s Annual Holiday Survey, released Nov. 10, shows a similar downward trend in gift card purchases, but a larger number of consumers buying them. Then again, its survey of more that 13,000 consumers was commissioned by conducted online by an independent research company between Sept. 26 and Oct. 7—at the height of the Wall Street crisis, and well before gasoline prices plummeted.
Nearly two-thirds (66%) of consumers surveyed by Deloitte said they plan to buy gift cards, just slightly below last year’s 69% of consumers. And for the fifth straight year, those surveyed said gift cards are expected to be the top purchased gift.
Also in the Deloitte survey, 23% of those polled say they are concerned about the store closing before they can use a card. Only 3.1% of those surveyed in the NRF poll say they are worried that the retailer will go out of business.