STAMFORD, Conn. -- Gift cards aren't just last-resort purchases by baffled holiday shoppers anymore. They are becoming the present of choice for those who want to help friends and relatives cope, reported Bloomberg. Spending on holiday gift cards may climb 20%, to $35 billion, this year, according to Archstone Consulting LLC, boosted by cards that aid consumers contending with higher food and fuel costs. That tops some estimates for holiday sales on websites.
Gift cards that pay for gasoline at ExxonMobil stations, groceries at Wal-Mart or medical bills [image-nocss] through health insurer Highmark Inc. will help increase the category to 5.9% of total U.S. holiday spending this year, according to Archstone. That is up from 4.9% in 2006.
"The practical usage of gift cards is the biggest story this year, due to economic fears of many consumers and tighter budgets," Heather Dougherty, director of research at Experian Group Ltd.'s Hitwise, New York, which measures web traffic, told Bloomberg. "We see people who are searching for things like gas and grocery gift cards."
Gift cards represent one of the few bright spots for retailers this holiday season, said the report.
"We've seen a cultural shift in how we view gift cards, from a thoughtless, lazy person's gift to a thoughtful gift," Scott Krugman, a National Retail Federation (NRF) spokesperson, told the news agency. "It's becoming a practical gift for practical purposes."
Gift card sales also have been spurred by their increased availability in supermarkets, convenience stores, gas stations and drugstores, the report said.
Prepaid debit cards such as those from Visa and MasterCard may be the most popular type of gift card this year, Stamford, Conn.-based Archstone estimated, accounting for 16% of the total market. Cards for discounters such as Wal-Mart and food and beverage providers such as Starbucks probably will be the next most popular categories, Archstone said.
Shoppers can also buy gift certificates for customers of Portland General Electric Co. in Portland, Ore., and Equitable Resources Inc. in Pittsburgh to pay utility bills.
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