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November 15, 2007

In news sure to warm Zach's heart, Kiplinger's is reporting that gift cards will fly off store shelves this holiday season. Merchants are expecting to do $30 billion in the gift card business this year, a 15 percent increase over holiday season 2006. Retailers are looking at creative ways to get consumers to use their cards more quickly this year, such as by adding 5 or 10 percent to a card's value if it is used before December 31st, because they can't claim gift cards in their revenue until they are used. If consumers use their cards in December 2007 as opposed to sale season in January or February 2008, retailers can make their holidays appear merrier and brighter in their ledger books, to the joy of Wall Street.

Gift cards are expected to account for 7 percent of holiday gift spending this year.

See also:
"The Deadweight Loss of Christmas," by Zach Wendling (an ITA holiday favorite)
"Chipping Away at the Deadweight Loss of Christmas," by Zach Wendling
"More on the Deadweight Loss of Christmas," by Zach Wendling
"Gift-Giving from the Heart," by Zach Wendling
"Best Buy is Smiling," by David Darlington

Posted by David Darlington at November 15, 2007 10:31 PM

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