Shoppers worried about visiting stores as COVID-19 cases surge, and unwilling to risk gifts arriving late because of shipping delays are snapping up prepaid debit cards, according to companies that measure gift-card sales.
Gift card purchases in the first week of December were twice the rate in the same period last year, according to InMarket, a data-analytics company. Gift card sales jumped 48% last weekend compared with earlier in the week as deadlines for free shipping with guaranteed Christmas delivery expired, according to Rise.ai, which manages electronic gift card programs for more than 5,000 brands.
The gift card boom might not end up helping holiday sales. Retailers can’t record the revenue until the cards are redeemed, according to Nathan Ehrlich, chairman of the Retail Gift Card Association.
The cards could spur sales next year, though, as shoppers return to stores or redeem them online, The Wall Street Journal reports.
The average shopper is spending 17.6% more on gift cards in 2020 compared with 2019, while the average number of gift card transactions per shopper is up 12.3% compared with last year, InMarket says. A sizable portion of gift cards go unused, allowing merchants and card issuers to later book some of those funds as revenue under accounting rules. Read the full story.