After last month's dreadful holiday selling season, some retailers have charged renewed optimism on gift cards.
Once the turf of toy stores, bookshops, and home-electronics chains such as Best Buy
Because of the popularity of gift cards and gift certificates, some predict the post-holiday shopping season will save the day for the country's hungry retailers. The cards are prepaid, but retailers can't book the transaction as a sale until the recipient cashes in. And most recipients redeem gift cards within two weeks.
Some industry watchers, such as consultants Bain & Co., predicted a 20% uptick in gift-card sales for 2002. Yet even the company's high-end forecast, calling for $38 billion in card sales, represents a small percentage of the total retail sales market. It won't make much of a dent.
Even more worrisome, nervous retailers cut prices drastically after the holidays to help clear out stagnant merchandise. So even if same-store sales bounce back on gift-card redemptions, it will happen on wafer-thin margins.
It seems the 2002 shopping season won't be able to shed the "Yule Be Sorry" tag.