Gift Cards - the Best Christmas Present Merchants Ever Received

They are not number one among consumers, but gift cards could be among the best Christmas present US businesses will ever receive. Merchants could take home about $8 billion dollars or more in unredeemed value from the sale of gift cards this holiday season. Again.

A survey conducted by Consumer Reports National Research Center, made public this week, reveled that more than 50 percent of people might have received gift cards on Christmas of 2006; nevertheless, 27 percent of those recipients have yet to redeem one or more of their cards.

The Education Campaign

This is the basis for the Consumer Reports' Second Annual Public Education Campaign, kicked off on November 13, to warn consumers about the traps associated with gift cards. They remain a favorite this holiday season mainly because shoppers don't have to second guess in search of the right present to give family members or friends.

"We're building on our successful campaign from last year to inform consumers about the latest holiday pitfall to avoid," said Jim Guest, president and CEO of Consumers Union, nonprofit publisher of Consumer Reports.

Wasted Gift Cards

Consumers Union warns that many gift cards given away turn into wasted money. According to their survey, 19 percent of those who received gift cards in Christmas of 2005 did not redeem them last year, and 51 percent of them received even two or more cards. This could represent about $8 billion dollars in unused gift card value according to Tower Group, a research firm in Needham, Mass.. Consumer Reports points out that Best Buy acknowledged a $43 Million dollars gain for 2006 from unused gift cards in its annual report.

Among the reasons consumers gave for not using their gift cards: they did not have the time to go out and buy; didn't find what they wanted; forgot they had their card; they lost it or the card expired.

Still, gift cards will remain a popular item and, if Tower Group is correct, consumers will spend about $100 billion in gift cards for 2008, compared to $80 billion estimated for 2006. Christmas shoppers will see gift cards everywhere they go, from gas stations to malls and every store in between.

How You Can Avoid Wasting Your Money

As last holiday season, Consumer Reports is giving some advice to the estimated 62 percent of shoppers planning to buy gift cards this Christmas season: check the fine print for restrictions and fees; buy a card with a value equal to the price of products found in the store; and give the card along with the receipt in case it has to be returned for some reason.

And if you receive a gift card, make sure you register it if you are required to do so, and spend it quickly to avoid expiration dates or expensive monthly fees.

Daniel Brizel "Consumer Reports Takes on Gift Cards in Second Annual Public Education Campaign" Consumers Union.org

"Avoid gift card pitfalls" Consumerreports.org