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Will electronic options give gift cards a new jolt of popularity?

Consumer Reports News: November 07, 2011 02:08 PM

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While retailers are offering shoppers more electronic and mobile gift card options, according to a survey released today by and, a Consumer Reports poll shows that the number of people getting a gift card of any type has dropped over the past few years.

According to our recent holiday survey, 48 percent of adults received a gift card during the 2010 winter holidays, down from a peak of 62 percent in 2007. Nevertheless, gift cards remain popular, behind clothing and electronics and ahead of toys, money, and jewelry as gifts people are considering giving this year. Sixty-two percent of our survey respondents say they plan to give at least one.

It's true that gift cards no longer have as many strings attached, such as short expiration dates and inactivity fees. Plus it's simple to purchase an electronic gift card online and just email it to the recipient. But does that mean the card will actually get redeemed? According to our poll, a quarter of adults still have one unused gift card from last holiday season, and 55 percent of that group have more than two unused cards -just something to keep in mind as you plan for your holiday shopping.

"Gift cards are something of a double-edged sword," says Consumer Reports retail expert Tod Marks. "People love them, but often the cards end up collecting dust in a drawer. Our study also shows that two-thirds of people who get a card end up spending more than the card’s face value, so in effect they’re paying for their own present."

Top reasons for not redeeming a gift card, according to our survey:

  1. 37 percent have not found anything they wanted to buy.
  2. 36 percent haven't had the time to use the gift card.
  3. 34 percent forgot about it.

Regardless of whether the cards ever get used, businesses are continuing to upgrade their gift card offerings to include mobile and digital versions. In the and survey, 51 percent of the gift cards were available electronically, up from 41 percent last year. The survey included gift cards for retail, dining, and general purpose, among others. In addition, retailers such as Best Buy, Gap, and Pizza Hut have all added virtual versions of their gift cards, while Target and Starbucks added mobile-specific cards, and Amazon now lets consumers send gift cards via Facebook.

Are you planning on giving gift cards this holiday season? Does an electronic version appeal to you?

Economy top concern among shoppers at start of holiday season [Consumer Reports]
Gift cards go virtual and mobile []

Maggie Shader

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