Gift cards were a top 2008 holiday purchase, for the 5th straight year. According to a 2008 Holiday survey by Deloitte, 66 percent of consumers planned to purchase at least one gift card last holiday season, placing gift cards as one of their top holiday purchases. Here are a few key reasons gift cards are a vital ingredient to a retailer’s holiday success:
• Everyone loves to receive a gift card: Gift cards are an easy, convenient purchase for shoppers. Gift cards also target last-minute shoppers, as well as people who don’t want to participate in the shopping bustle. Place your gift cards by the POS as a last minute reminder.
• Redemption increases sales: According to a 2008 Consumer Reports study, 61 percent of gift card recipients spend 20 percent more than the value of the gift card they receive. These shoppers are shopping off-season–primarily in January–which extends your holiday shopping season. In fact, more than 60 percent of gift card redemptions occur in January.
• Interest-free business loan: Selling a gift card is like getting an instant loan, and sometimes you don’t even have to pay it back. Another survey found that nearly half (47 percent) of consumers have at least one unused gift card. In addition, it is estimated that unused gift cards equated to $8 billion in 2007. Now that is an economic stimulus!
