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Holiday shoppers love the gift that's never returned

Thursday, December 24, 2015 - 11:20
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As the holiday shopping season comes to a close, procrastinators still have one fail-safe option: gift cards.

AS the holiday shopping season comes to a close, procrastinators still have one fail-safe option: gift cards.

Whitney Young plans to give five this year, including an American Express card for her mother and one from Best Buy for her father. "It's a lot better than giving cash and a lot more useful than picking out something they might not use," said Ms Young, a junior at George Washington University in Washington, DC.

Americans are projected to spend nearly US$26 billion on gift cards this holiday season, according to the National Retail Federation, and many of those sales have taken place in the four days leading up to Christmas. The convenience of gift cards has made them a particularly popular gift, and this year is likely to be no exception. Nearly 75 per cent of Americans say they will buy at least one gift card for the holidays.

Annually, Americans spend more than US$120 billion on gift cards, a figure that is expected to grow steadily through 2017, according to the research firm CEB TowerGroup.

They have become staples of company events, family holidays and children's birthday parties. Even Volkswagen turned to Visa gift cards last month to apologise to customers who were affected by the automaker's emissions-cheating scandal. "More people, especially the under-25 crowd, are saying, 'Just give me the money and let me go buy whatever I want. Don't even try to figure me out,'" said Marshal Cohen, a retail analyst for the research firm NPD Group.

Indeed, gift cards were the most-requested holiday gift for the ninth year running in an annual survey conducted by the National Retail Federation. This year, 59 per cent of respondents said they would like to receive one.

Gift cards are certainly on the top of Greg Jasani's list. In fact, they're the only item on his list. "Those things are worth their weight in gold," said the 23-year-old student at George Washington University's School of Medicine & Health Sciences. "My parents keep saying, 'You're so difficult to buy for. You never tell us what you want.'" That doesn't mean they necessarily enjoy giving them. "They're fighting hard against gift cards," Mr Jasani said.

His grandmother, though, has given in. Last Christmas, she gave him gift cards to Subway, Amazon, Starbucks and iTunes, which he has continued to use all year. The other day, he bought a Subway sandwich using one. "It saves me a lot of trouble," Mr Jasani said. "And it probably saves her a lot of trouble, too."

The relative lack of must-have gifts this holiday season is likely to make it an especially good one for gift cards, analysts say. Shoppers are uninspired and are looking for an easy fix. "The hot items are the same things that were there last year: headphones, tablets, big-screen TVs," Mr Cohen said. "Basically, nobody knows what gifts to buy anymore."

Bradley Gorewitz, 31, said he is generally clueless when it comes to shopping for his mother and sister. "Gift cards are my default," said Mr Gorewitz, who lives in Rockville. "That's what I give my mum 75 per cent of the time."

The ease of picking up gift cards, which are sold by the dozen at chains such as CVS and Costco, has only added to their appeal. They have become ubiquitous, too, spreading from traditional retailers to petrol stations, strip clubs and tattoo parlours.

The website ManCrates.com even offers a novelty "smash and grab gift card" encased in a brick, part of a kit that comes with a hammer: "Disassembly required." Perhaps, said Sara Bernstein of Fair Lawn, New Jersey, they've become a little too easy.

Of the 12 children who showed up to her son's 9th birthday party last month, nine came bearing gift cards. "I don't know that he really gets the concept of them yet," Ms Bernstein said. "He was definitely more excited about opening 'Star Wars' Legos." The gift cards, worth about US$200, are still sitting in a drawer.

Others, though, put gift cards to immediate use. When Kassie Leon's aunt was pregnant with her second child, she already had the requisite stroller, car seat and such. So her extended family gave her Home Depot gift cards so she could fence in her back yard to create a safe play area in her Jersey City, New Jersey, neighbourhood. The cards covered about 60 per cent of the cost.

Ms Leon's relatives do this for all big family milestones. When her younger cousin went away to college, for example, everyone pitched in with gift cards to Barnes & Noble, Target and Kmart. When Kassie, now 30, moved into her first apartment, she received an avalanche of gift cards to Pier 1 and Home Depot.

Meanwhile, Nichole Cubbage, a senior at George Washington University, uses them to pay her bills. "A US$25 Visa gift card is one student loan payment," she said, referring to the modest fee she pays while in school (bigger bills come later). She also uses cards to pay her monthly mobile phone bill. "Presents are nice, but I'd rather have my bills paid." Still, there are downsides.

For some, giving a gift card feels a bit like wearing their wallet on their sleeve - the recipient knows exactly how much they've spent. "There's always that awkward moment of 'I have no idea how much this person spent on me, but if I give them a US$35 gift card, they know exactly what I spent,'" said Kathy Grannis Allen, a spokeswoman for the National Retail Federation.

Which is why, analysts say, gift cards may never supplant every gift under the tree. "That ugly sweater, that shirt-and-tie combo dad gets every year, the fruit cake that gets delivered from your Aunt Tilly - there are certain things you just know you're going to get every year," Mr Cohen said. "A gift card is never going to replace them."

WP