Even though more consumers are purchasing gift cards this year, they’re being purchased in smaller amounts and used for more practical items, a new study reveals.
Although research by Archstone Consulting states the number of gift cards purchased increased in the six months prior to April 2009, the average value of cards is down by $6, or 11.5 percent, to $46. Also, most gift cards being purchased are for establishments that offer more practical items or services, such as restaurants, department stores and various big-box stores, such as Target or Wal-Mart.
“Gift cards are still the gift choice among consumers, but gift card purchases reflect the challenging economic times,” says Archstone founder Dave Sievers, in a statement released Thursday. “Values per card are down, and the focus — similar to last year — is on the pragmatic, not frivolous.”
Archstone is predicting that this holiday season’s gift card market will range between staying flat at $24.9 billion and decreasing by 5 percent. Archstone also predicts that the sales for the 2009 holiday retail season will fall by 1 percent compared to 2008’s holiday sales results.That overall sales drop is identical to the one projected earlier this month by the National Retail Federation.
While overall sales may decline, online gift card purchasing and distribution is increasing, Archstone says. Several retailers, such as CVS and Travelocity, have begun to offer an online gift card service, where a customer can pay for and e-mail a gift card to its recipient.