Wednesday, November 19, 2008

Gift Cards Could Suffer From Economic Woes

I received an e-mail today - one of those forwarded chain notes I often get. It supplied a list of retail stores, and warned recipients not to purchase gift cards as Christmas presents from these companies because they have announced plans to close up shop by January 2009. This got me to thinking: will gift cards, a typically popular holiday gift, suffer in wake of the current economic climate?

An Ipsos Reid study conducted around Christmas-time last year found that 88% of respondents like receiving gift cards. In fact, 72% would rather a gift card than an actual gift! I don't think these numbers will drop this year simply due to fear that a store might close, but if e-mails like the one I received continue to circulate, it might just scare people off from buying gift cards.

The whole idea of a gift card is that the person can buy something they want. While it replaces an actual gift, what I've often found is that you end up spending more money than you otherwise would have with a gift card. Now if the recipient ends up getting nothing from the card because the company went out of business (a horrible experience: trust me, I've been there!), you've now both disappointed the person and lost a whack of money.

Will you be buying gift cards this year?

As an aside, I thought it funny that the most often-requested gift item I've heard over the past few months from family and friends is in fact a gift card, but of a specific kind: a gas card! You know times are tough when filling up your car becomes a luxury!

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