How Consumers Could End Up Taking a $75M Bath In '08
This is pretty darn interesting, in my own humble opinion. According to an AP article that I came across today on Yahoo:"As more retailers file for bankruptcy or go out of business, more than $75 million in gift cards are at risk of becoming worthless pieces of plastic this year"
I was recently quite fascinated by reading that US consumers shelled out more than $26.3 BILLION on gift cards during this past holiday season (NRF). We are not talking annual here, just the holiday's
With consumers about as far down on the pecking order to be compensated for what is owed to them as the guy that cleans the toilets if a retailer does in fact go bankrupt and ceases to operate entirely, the press has begun noting an increase in people making trips to the mall in order to cash in gift cards "just in case".
I'll be watching very closely here over the coming months to see if scared selling on behalf of gift card holders has an impact on final retail sales figures. Although a few million bucks is surely a drop in the bucket here, if this gives birth to a wider negative stigma surround gifts cards and they begin to lose popularity even half as fast as the handy little cards gained it, things could get interesting.
With The Commerce Department stating that retail sales rose by 0.3 per cent in January - which shocked analysts from LA to Tokyo - if this starts a chain reaction and gets consumers ditching the gift card idea by the droves, this could actually have a short-term positive effect going forward, but not so great long-term.
Labels: Gift Card Worthless, Retailer Bankruptcy
posted by "Staff" at
5:51 PM
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