According to the National Retail Federation, as reported in today’s USA Today, one third of Americans (32%) are paying for their gifts with credit cards. 40% are using debit cards, which act like an instant check, taking money from their bank account, 6% are using checks, and 22% are using cash. It’s interesting how quickly good old fashioned checks are fading from daily retail use, and how widely used debit cards have become. But the real story here is that 1/3 of all holiday gift purchases are being put on credit cards, to be paid back later. The Holiday season, meant to be a season of peace and good will, has become a precursor to months of gradually paying back holiday debt.
Another interesting statistic: Guess how much money retailers raked in through unclaimed or expired gift cards in 2006? Guess higher. A little higher – 8 billion dollars! In addition, most people who purchase with a gift card spend 10-20% MORE than the card, which is good for retailers. No wonder retailers are working so hard to normalize and promote gift cards! I think there should be a kick back to the giver, where if the gift receiver doesn’t cash in their gift card within a year, YOU get 20% of it’s value. Now that would increase gift card sales!
How are you paying for gifts this year? How long do you expect to pay off your holiday credit card bills? Giving any gift cards?