Gift cards, for the first time, will be favored over toys, games, even music and movies, as the gift of choice this holiday season.
The cards have become so popular that they will likely rival long-favored apparel when shoppers prepare their gift-giving lists, according to the 2006 American Express Gift Card survey of 1,013 shoppers.
The survey found that 66% of shoppers plan to purchase gift cards this year, up from 57% in 2005 and 55% in 2004. Those planning to purchase apparel remained steady at 68% in 2006 and 2005, only a slight increase from 66% in 2004.
Gift cards are also a popular way of incenting staffers. Some 32% of respondents said they would like to receive a gift card as a reward for a job well done this year, surpassed only by cash and checks. More than one in four consumers (28%) reported currently having a gift card in their wallet or at home, the survey found.
The American Express Gift Card survey has been tracking gift card growth over three years of holiday shopping. The impact can be felt most prominently at retail during the fourth quarter, but is also extending the holiday shopping period beyond the traditional time frame as recipients often redeem the cards well into the next year.
According to the survey, 56% said they return fewer gifts when they receive gift cards. A third will redeem their gift cards within a month, and nearly one in four will redeem their cards within six months. Seven percent say they plan to redeem gift cards during the post-holiday week. One factor leading to the lengthy redemption time period is that receivers are waiting for time to go shopping (32%), waiting for “the perfect item” or something special they want to buy (28%), or for a “sale at my favorite store or tax-free shopping” (18%). When gift cards are redeemed, one in three will use them to buy something for someone else (34%); others will re-gift the card (8%).
“While the post-holiday shopping season is traditionally dominated by gift-exchangers and bargain-hunters, retailers should expect to see a growing number of consumers armed with gift cards and shopping with a different mind-set,” said Valerie Soranno Keating, President, American Express Travelers Cheques and Prepaid Services, in a statement. “Gift cards come with the unspoken permission to buy something special, and consumers will be looking to use gift cards less on close-outs and more on luxuries — the latest fashions, the just-released CD, those hard-to-get tickets, or a day at the spa.”
In most cases, 66%, reported wanting to give a card where the recipient can choose their own gift, and 57% said that the option of giving gift cards has changed how they think about shopping. Seven in 10 reported finishing shopping faster with less stress. The trend is allowing shoppers to feel less pressured to hit the stores at their busiest times during the holiday shopping rush. Meanwhile, 60% said they would go to the mall and stores less often, including Thanksgiving weekend; some will likely get their holiday shopping done earlier (59%) while others plan to start later because they know they can always get a gift card (45%).
Who are the most likely to buy gift cards? Some 58% are aunts, uncles, cousins or other relatives, a friend or acquaintance (56%), a child or friend’s child (54%), someone who has provided a service in the past year such as a babysitter, teacher, housekeeper, or postal worker (43%), or a parent (40%). One in four will receive a gift card because they are considered “hard to shop for.” One in five will receive a card in combination with another gift.
And don’t expect a thank you. Sixty-six percent of respondents said a traditional thank you note, a call or e-mail is not likely.
The survey also found that the Top Five gifts this holiday season will be:
- Apparel (68% holding steady from 68% in 2005 and 66% in 2004)
- Gift Cards/gift certificates (66% up from 57% in 2005 and 55% in 2004)
- Toys/Games (64% compared with 63% in 2005 and 60% in 2004)
- Music/CDs/DVDs (63% up from 62% in 2005 and 58% in 2004)
Other popular items this year include cash (46%), perfume/cologne, cosmetics (43%), books/magazines (37%) jewelry (35%), hardware and tools (34%), housewares and appliances and experiential gifts (both 30%).
How will all the shopping break out? One in three consumers (34%) will shop in December, 25% are last-minute shoppers and 21% plan to do most of their shopping the day after Thanksgiving.