Lawrence sees national trend in gift card sales
‘Tis the season for shopping and this year gift cards are on everyone’s list. National gift card sales are expected to reach an all time high this holiday season.
Their widespread availability and convenience have made gift cards on 56 percent of consumer’s shopping lists. Local Lawrence boutiques do not expect to see the same national results but agree that popularity in gift cards continue to be on the rise.
“I think the popularity in gift cards comes from the fact that they are more widely available and more people are seeing the benefits of using them,” Lynnae Edwards, Olathe senior, said. “They can be used at any time, they are convenient to transport and can fit the tastes of some of the more picky recipients on people’s lists.”
According to the fourth annual National Retail Federation survey (NRF), conducted by BIGresearch, sales in gift cards are expected to increase by about 34 percent. In 2005, sales reached $18.58 billion. This year, sales are expected to increase by over $6 billion and reach a total of about $25 billion.
Joe Flannery, president of Weaver’s Department Store, 901 Massachusetts St., said his store has seen significant increases in gift card sales for the past four years. He saw a 20 percent increase last year and said he will continue to see figures rise this year. But for local boutique stores, like Britches, 843 Massachusetts St., gift card sales have not fluctuated since the beginning of the holiday season.
“I think our gift card sales aren’t increasing because we are a smaller store in a college town,” said Abby Blackwell, Britches manager. “Not a lot of people know we even offer gift cards.”
Some stores set goals for their gift card sales. Blackwell said Britches employees are instructed to remind their customers of gift card availability, but added that they do not rely heavily on these sales. Other chains, like Texas Roadhouse, 5901 SW Huntoon St., Topeka, Kan., have set goals for their employees.
Alyssa Moran, Texas Roadhouse employee, said Texas Roadhouse made $125,000 in gift card sales last year during November and December. This year, their goal is to sell $175,000 during the same months.
“It’s great for the company because 75 percent of the money comes back in January and February, which are generally slower months,” Moran said.
Stores receive this benefit from selling gift cards. Consumers purchase their desired amount but this purchase is not registered as a sale until its recipient redeems the gift card. The majority return in January and February.
“Most of our gift cards return right after the holidays. That’s when we have our larger after-holiday sale,” Flannery said.
The average amount spent by a single consumer is also expected to increase by about 32 percent. According to the NRF, the average consumer spent around $88 last year. This year, the average consumer will spend about $116.
“Our customers usually spend around $50 to $75 per gift card,” Flannery said.
“Usually, customers will come in looking to buy a pair of boots and realize that boots cost around $200,” said Tim Arensberg, owner of Arensberg’s Shoe Store, 825 Massachusetts St. “Instead, they usually end up buying a $100 gift card to help their friend or relative get closer to buying the boots they want.”
The business in selling gift cards has become popularized through sidewalk posters and TV advertising.
“At our store, our gift card sales rely on our advertising because we are a new restaurant in Lawrence,” Ron Green, Spangles assistant store manager, said. “Word of mouth is very important. We hope that people who like our store will let others know about our food by giving them a gift card for Christmas.”
Green has seen a lot of consumers come in to buy $20 to $30 gift cards. Spangles also offers a promotion that if a consumer buys a $10 gift card they can receive a $20 savings card.
“Our business is really busy during the holidays,” Green said. “We just hope that these gift cards bring in traffic after the holidays are over.”
Some consumers feel that buying gift cards is the easy way out but the majority does not care if that is true. In the same survey, about 80 percent polled said they planned on buying gift cards for Christmas and over half said gift cards are on their wish list.
“They are just easy because the person buying the gift doesn't have to worry about getting the wrong thing and the recipient doesn't have to worry about pretending to like something and then having to return it secretly for store credit,” said Elizabeth Tschetter, Borders sales associate.