It's over. The holidays have moved on, even if those leftovers in the fridge have another culinary tweak or two before they, too, bid farewell. And while retailers are now gearing up for a busy week of being handed over plastic -- it's not necessarily for credit card refunds on unwanted gifts or ringing up monster year-end deals.
Thanks to the growing popularity of gift cards, more and more folks will be hitting the stores in the coming days to consume their plastic presents. And, yes, it's not fair to call it plastic, since this year found online heavies like eBay (NASDAQ:EBAY) and Amazon (NASDAQ:AMZN) peddling their virtual gift certificates late into the holiday shopping season.
The National Retail Federation claims that one in three of us will have bought at least one gift card this holiday season. Those small purchases add up, as the TowerGroup consultancy pegged last year's gift certificate tally at $45 billion.
This opens up an accounting nuance because a retailer isn't allowed to count a gift card purchase as a sale. That bookkeeping event takes place when the recipient uses the store credit. The fact that the typical purchase usually runs 40% over the value of the gift card is a welcome kicker for the retailer, especially for the big ticket consumer electronics specialists, such as Circuit City (NYSE:CC) and Best Buy (NASDAQ:BBY).
While many retailers are working on fiscal quarters that continue through the end of January, many gift card redemptions won't take place until the following quarter -- or at the very least create a favorable impact on comps in future months, at the expense of December's count.
This doesn't mean that one can dismiss weakness at certain retailers early in the holiday season like Wal-Mart (NYSE:WMT). Too many other retailers were doing well during that time. However, gift cards have done the unthinkable: They have stretched the seasonal shopping season long after the holiday cheer has been tucked away into storage.
Have you given or received any gift cards this holiday season? What about virtual gift certificates? Can Amazon stand a chance on that front, relative to established local shops? All this and more -- in the Amazon discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz did receive a few gift cards last week. He's not afraid to use them. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
