Gift cards continue to grow in popularity
December 22. 2013 7:06PM
Eric Neilson works at the Irving Circle K gas station in Milford, a popular spot to pick up a cup of coffee, a quick snack and some last minute holiday gifts.
Like other gas stations and convenience shops, Circle K has been selling lots of gift cards that drivers can use to fill up their tanks and or buy anything in the store.
“It’s like a debit card and you can put as much money as you want on it,” said Neilson, who figured the shop has sold at least 100 cards to holiday shoppers.
With the clock ticking on Christmas shopping days left, gift cards may be the last resort of last minute shoppers. But gift cards have been a popular item throughout the holiday season, and there are now cards available for everything from extravagant dinners to everyday items like groceries and gas.
“I’m not too big on gift giving, so for me that kind of gift card is very appealing,” said Neilson. “It’s economic and it’s very practical.”
Over the past couple of decades, revenue from the gift card industry has gone from zero to $29.8 billion. Blockbuster and Neiman Marcus, the upscale Dallas-based department, store get credit for launching the modern age of plastic gift cards back in the early 1990s as a way to cut out counterfeiters who were printing up bogus paper gift certificates.
Gift cards have shed their original reputation as an easy out for lazy shoppers who don’t want to invest the time or thought in a personal gift. Today’s cards are described as savvy purchases that help shoppers avoid wasting money on gifts that go from under the tree to the back of a closet only to emerge again at a springtime yard sale.
And according to the National Retail Federation, gift cards have topped the list of most-wanted gifts for seven years, with nearly 60 percent of people choosing a card over gadgets, sweaters and other popular presents.
Department stores and restaurants sell about 70 percent of gift cards purchased during the holidays.
“We sell gift cards like crazy at this time of year,” said Candace Burgess, guest service manager for the Bedford Village Inn.
Burgess said the inn has sold about 60 cards a day, many of which are used for dinner at the inn’s well-known restaurant.
But on the Bedford Village Inn’s website, shoppers can purchase gift cards with a value up to $1,000, so travelers can also use the cards for a weekend getaway.
Burgess said the Inn switched over from old-style paper gift certificates in 2006.
“It’s easier to keep track of the cards,” she said.
Gift cards from New Hampshire’s ski resorts and lodges have been hot gifts for several years.
“I don’t know exactly how many we sell but there’s a definite uptick in sales around the holiday,” said Stacy Lopes, marketing manager for Ragged Mountain resort in Danbury.
“People can use them to pay for lift tickets, ski school, equipment rentals or food and beverages,” said Lopes, adding that it’s both a personal and welcomed gift for avid skiers and snowboarders.
And gift cards are available for other sports activities such as indoor sky diving, ice skating and bowling.
“It’s an awesome gift especially for a secret Santa or Yankee Swap,” said Eric Leach, manager of Jada Bowling in Nashua.
Gift cards had some rocky days early on. Some businesses charged fees or imposed expiration dates, which left a lot of card recipients holding a lot of worthless plastic.
But scores of laws and regulations have been passed to protect gift card givers and recipients. In New Hampshire, cards with a value of $100 or less have no expiration date. Although cards worth more than $100 expire after five years, businesses are required to turn the money over to the New Hampshire Treasury’s Abandoned Property Division, and cardholders can collect the money from the state.
And there have been other big changes in the gift card industry. The cards no longer cover something someone might like or want, they cover things people need.
Tuition.io, a Santa Monica, Calif.-based company, offers gift cards to shoppers who would like to step in and make a payment on a student loan.
Comcast sells gift cards up to $500 in value that let recipients sign up for services or pay existing bills.
Energy companies sell cards that holders can use to help pay for a tank of oil or some propane.
Janice Fusco of Viking Propane in Candia said that’s nothing new and that Viking has been arranging gift certificates for a warm home in winter for years.
“We’ve also donated gift certificates for silent auctions and fundraisers in town,” she said.
Back in 2009, Blue Cross Blue Shield of Florida changed the gift card game when it started offering health-care gift cards that can used to pay a monthly premium or for a particular service. Other hospitals and health-care providers offer similar cards, but they haven’t been available in New Hampshire.
However, Gentle Dental in Nashua sells gift certificates that can be used for different services and needs or as a payment for a new patient offer.
Not all gift cards hit the mark, but fans say when in doubt about what to buy, and when time is running out, gift cards are a great option. And while some industry watchers say up to $2 billion in gift cards sit forgotten in desk drawers each year, those estimates are better than the annual $50 billion worth of holiday gifts that are returned to stores each year.