As gift cards continue to gain momentum in the holiday shopping mix, unused cards are increasingly becoming an issue for the merchants who sell them, according to a recent report by Deloitte & Touche.
For the fourth straight year, gift cards are expected to be the top gift purchase this holiday season, with 69% of consumers planning to buy them, compared to 66% last year, the survey concluded.
“Not only are more people buying them, but they’re spending more on them,” said Stacy Janiak, Deloitte’s retail sector leader.
Whereas last year, respondents said they were going to spend on average $139 on gift cards for the holidays, this year, they said they plan on spending on average $199, said Janiak.
“That’s increasing at a pretty fast pace and it’s taking away from other categories,” she said.
At the same time, 49% of consumers have at least one partially or completely unused card, according to Deloitte & Touche. What’s more, on average, consumers with partially or completely unused gift cards have 3.7 of them.
“If you’re not into gift cards, you should be, and you should also have a strategy around the redemption of those cards,” said Janiak.
More than half of U.S. states have so-called escheat laws governing what retail stores can do with unredeemed gift cards, with some of the them requiring all or some of the money be given to the government at some point, she said. As a result, there is an added incentive to get gift-card recipients into the stores.
Most states have also enacted laws in the last five years or so preventing retailers from wiping out unused cards, she said.
“It’s not always the case that unredeemed cards are just free money to the retailer,” she said. “They don’t just get to keep the money outright.”
Also, as retailers are well aware, people who come in with gift cards often spend more than the amount on the cards.
“The goal is getting people in the store redeeming those cards,” she said.
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