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More are saying it with plastic: Gift cards the holiday present of choice

By Monica Soto Ouchi
Seattle Times retail reporter

STEVE RINGMAN / THE SEATTLE TIMES Michael Ahern is former CEO and Kathy Gersch is executive vice president of marketing and merchandising at Seattle's GiftCertificates.com.

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Sweaters? So five minutes ago.

Gloves? Passé.

What to give? Try cold, hard plastic.

For the first time, gift cards are expected to replace apparel as the gift of choice for the holidays, according to the Deloitte & Touche 19th annual consumer survey, which tracks holiday spending plans and trends.

Roughly 64 percent of consumers surveyed said they plan to buy gift cards. That's up from 60 percent the year before and double the rate of consumers that plan to give greenbacks.

What gives?

Tara Weiner, Deloitte & Touche's national managing partner for consumer-business industries, points to the number of gift cards now available at the Safeway checkout stand — from upscale retailer Nordstrom to Borders Books & Music.

"That's testimony," Weiner said. "People are just out of time."

The gift-card market has surged in recent years — it's the only retail segment this holiday season that's expected to see double-digit growth. Not only are more retailers offering gift cards, they're using them as a fashion statement.

Target, for instance, offers a Mr. Sandman gift card that shows a snowman made of sand, holding a surf board. Another card featured tangled Christmas lights.

Specialty-coffee retailer Starbucks, whose reloadable stored-value cards hit the $1 billion mark in October, has offered 40 designs to customers since launching the card three years ago.

The trend keeps growing. The National Retail Federation projects that gift-card sales will surpass $55 billion this year, a 22 percent increase over the year before. By 2005, it forecasts sales of $65 billion.

Kathy Gersch, who is the executive vice president of marketing and merchandising for for the Seattle-based GiftCertificates.com, said gift cards are driving the decisions of large companies.

The Seattle Mariners this week began selling gift cards that fans can use to buy game tickets, gift-shop items and ballpark concessions.

"It's somewhat of a societal shift," Gersch said.

In its annual survey, Deloitte & Touche said the average respondent planned to buy 4.7 cards.

The card were more popular with those 65 and older and those with incomes of at least $100,000.

The survey also showed that consumers this year plan to stop at fewer venues to purchase gifts, which gives retailers an added incentive to offer gift cards to customers.

"If you're not able to satisfy them by having the right size or the right color, you want to, at least, do something that locks that consumer in," Weiner said.

GiftCertificates.com is now selling "gift sets" — multiple gift cards bundled to create a more personal experience for what really is a thin piece of plastic.

Its "night on the town" set, for instance, include gifts cards to a restaurant and movie theater. The company recommends the giver package the cards in a Chinese take-out box.

It also created a "gifting resource" center on its Web site, where it spells out — gasp — etiquette for giving gifts.

"It's about making someone happy and getting something they want," Gersch said.

The rise of the gift card also should make January retail sales more important as consumers redeem their cards after the holidays.

Retailers close their books for the year Jan. 31.

Either way, expect a gift card if you're a relative or a friend:

A Comdata survey showed that 59 percent of respondents have bought a gift card for a relative, and 44 percent bought one for a friend.

Just 8 percent reported buying one for a spouse.

Monica Soto Ouchi: 206-515-5632 or msoto@seattletimes.com

Copyright © 2004 The Seattle Times Company

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