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Gift Cards Drive Post-Holiday Sales

Gift Cards Drive Post-Holiday Sales
Barb Szyszkiewicz

by Doug Desjardins

In 2008, the sudden economic decline couldn't have happened at a worse time for retailers, who had already placed holiday orders for a season they expected to be a little slow but ordinary. The result was a fire-sale marathon that had retailers slashing prices to sell excess inventory long after Christmas had passed. fire-sale

That's not the case this year, but retailers are still working to maintain momentum from a stronger-than-expected holiday season with after-Christmas sales that will continue into the New Year. And most of those sales are targeting people who received one of the most popular gift items of 2009: a gift card.

According to a Consumer Reports survey, gift cards were the fourth most popular gift this year with 46 percent of consumers intending to buy at least one card, bettered only by clothing (56 percent), electronics (55 percent) and toys (55 percent). Teri Llach, chief marketing officer for top gift card provider Blackhawk Network, said the cards are practical because they serve a number of purposes. "Consumers can choose a card for specific retailers or pre-paid gift cards issued by banks," said Llach.

And with all those gift cards waiting to be spent, retailers are luring consumers into stores with bargains that - while not as spectacular as last year - are still impressive. Toys 'R' Us is promoting a number of buy-one-get-one-half-off sales, and Wal-Mart is taking a similar approach by reducing prices by 50 percent on select toys and home décor items.  Sears has cut prices on more than 300 items, including 10-percent markdowns on small appliances, and Target is providing a 15-percent discount on all purchases over $125.

Department stores, which typically get a big post-holiday bump from gift cards, are going even further to drive customer traffic. JC Penney is advertising its "biggest after-Christmas sale ever" with prices marked down up to 70 percent while competitor Nordstrom's is offering up to 40 percent off on products like apparel. And Macy's is offering deep discounts on men's furnishings, denim and women's sweaters.

Specialty retailers are also getting into the act. Best Buy has cut prices on most digital cameras by 30 percent and reduced prices by 15 percent on select home appliances. Kohl's has reduced prices on men's clothing by up to 50 percent, and is still offering free shipping for purchase of $75 or more online.

The category that saw the biggest increase in sales during the holidays was consumer electronics. ComScore chairman Gian Fulgoni said electronics sales increased "slightly over 20 percent" during the holidays and that "jewelry and watches also turned in a strong performance, but followed a very weak 2008 season."

Resources

Holiday Poll: To Black Friday and Beyond

Cash is King this Year for Holiday Gift Givers

Best After-Christmas Sales

E-Commerce Sales Rise by 5 Percent to Reach $27 Billion for the Holiday Shopping Season

COUPON TIME

Did you receive a gift card that you're ready to spend?  You don't have to go to the store to use that card.  Use it online and combine it with a free shipping deal for even better savings!

Comments

  1. Noticed restaurants these past two Christmas seasons have offered a premium on gift card purchases at the restaurant. Buy a $25 gift card and get a $5 gift card.

    Makes one wonder if slippage is different for the restaurant purchased card versus the card bought at a retailer.

  2. I love holidays! Especially if it's Christmas, there are lots of discounts, sales, and also free cards. I actually availed on several online stores and it was totally great 'coz you can save money plus there are also some free giveaways. How I wish it could be throughout the year. :D

  3. As with all consumers I react and respond to retail sales, coupon, credit and rewards. Yet, despite this, I am often left wondering if the offer is really a sale or discount. It appears that retailers in all product segments are offering a sale of some description all year! I recall not too long ago that retailers sales were limited to specific times of the year, such as Christmas, End of Financial Year Sales, Closing Down Sales, Moving Sales and maybe End of Season Sales. Does any one else wonder if we are getting a good deal, or is this a marketing strategy that influences our buying and has us believe the product is a good market price?

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