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Gift cards will extend holiday sales into January

NEW YORK — A resurgent demand for gift cards may extend retailers' holiday cheer well into January.

Gift card spending rose to nearly 18 percent of total holiday spending this year, the highest percentage since 2006 and up from 14.6 percent last year and 13.1 percent in 2009, according to a consumer-tracking survey by the International Council of Shopping Centers and Goldman Sachs.

The spending "might suggest a better sales performance in January as a result," said ICSC chief economist Michael Niemira, adding that this week will catch the first wave of gift card redemption with further activity on tap for the first two weeks of January.

Retailers don't count gift card purchases as sales until consumers redeem them.

Gift cards were already being tapped as the likely No. 1 gift choice, topping clothing, toys and electronics, before the holiday season started, Niemira said, adding that demand may have picked up because of a scarcity of must-have items and soft apparel demand this year.

The rise of digital gift cards that can be instantly delivered through Facebook, personalized videos and mobile phones also have made gift cards a novel gift idea in their own right, according to the National Retail Federation.

The trade group's holiday consumer survey in November showed holiday shoppers were expected to spend an average of $155.43 on gift cards, the highest sum since 2007 and up from $145.61 last year. Total gift card spending this holiday season is expected to total $27.8 billion, NRF estimated.

This year was the fifth year in a row in which gift cards were the most requested holiday gift, NRF's survey showed, adding that 80.2 percent of shoppers, vs. 77.3 percent last year, said they were planning to buy gift cards.

Retailers have not lost sight of the promise of gift cards.

About 57 percent of retailers offering the cards expected an increase in gift card sales this holiday season, up from 47 percent last year and 32 percent in 2009, according to accounting and consulting firm BDO's November survey of retail industry chief marketing officers.

Retail giant Walmart, which got aggressive in marketing its price-matching guarantee this holiday season, offered customers rebates in the form of a gift card if a rival beat its prices.

In the final countdown to Christmas, Walmart and other retailers, including Kohl's, heavily marketed gift cards as a great last-minute gift option.

Walmart's archrival Target, which called Dec. 26 the typical peak day for gift card redemption at its stores, offered shoppers who used their gift cards starting Monday savings of up to 50 percent on some women's apparel and other categories.

Target also gave shoppers who redeemed their cards on its website on Christmas Day $10 off purchases of $50 or more. Target has said most of its shoppers redeem gift cards within 60 days of receipt.

Gift cards will extend holiday sales into January 12/28/11 [Last modified: Wednesday, December 28, 2011 7:57pm]
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