But in this new “use it or lose it” climate, one wonders if consumers are more likely to plunk down cash for a gift instead. And that could hurt retailers, as many of them enjoy the post-holiday bounce from gift card sales. In a recent survey, 53% of consumers who redeemed cards said they always spend more than the face value.
Gift card holders could lose more than $75 million just from store and restaurant closings in 2008 and the numbers are expected to grow. In liquidations, the customer is out of luck in all cases. State laws have proved ineffective in protecting gift card holders during bankruptcies in California.
So, why not avoid this and dodge the gift card? There is always cash, which is never turned down, or online shopping, so you don’t even have to leave home. If you have a gift card and you’re worried about the health of the retailer, go out and spend it before it’s too late!
- Retail HOLDRs (RTH), down 22.9% year-to-date
