Her holiday shopping almost wrapped up, one of Nancy Gustafson’s last purchases was a gift card. But she was cautious. After hearing about some stores closing or leaving the area, she opted for a gift card from Macy’s, a company she feels will be around to back it up.
Her holiday shopping almost wrapped up, one of Nancy Gustafson’s last purchases was a gift card.
But she was cautious. After hearing about some stores closing or leaving the area, she opted for a gift card from Macy’s, a company she feels will be around to back it up.
“I’m being very careful about some stores, looking for the longer- serving places,” said Gustafson, of Easton, Mass.
Gustafson did the smart thing, consumer experts say.
As the economy slumps, shoppers are trying to make the most of their holiday dollars, so they don’t want to take a chance on a gift card if the store might go belly up.
Consumers are seeing stores like Linen ‘n Things, Circuit City, Bombay Company and Office Depot get into trouble. The closings are largely blamed on the sour economy, the inability of the retailers to get credit and flawed business practices.
While there are state laws that say gift cards must be honored for seven years and many businesses honor them beyond that time, when a business goes under, consumers may be left holding a piece of worthless plastic.
Nancy Howlett, who works at Kingston Town Hall, went for gift cards from Dunkin’ Donuts and Kohl’s. “That’s a safe bet,” she said.
As consumers buy more sale merchandise, gift cards are not as popular this year, according to Ellen Davis of the National Retail Federation.
Gift card sales are expected to drop 6 percent from last year’s holiday season total of $26.2 billion. Overall, holiday sales are expected to increase a modest 2 percent as the economic downturn continues.
But in the final shopping days before Christmas, gift card sales typically increase.
The most popular cards among consumers are for coffee shops, local restaurants and personal services.
Luciano Villani, manager of Westgate Mall in Brockton, Mass., said people are still buying cards from their favorite retailers, but those who are uneasy with a specific store can buy cards that offer flexibility. These range from mall cards to bank cards that may be used where credit cards are accepted.
While retailer, restaurant and personal-service cards do not generally carry a service charge and some may even offer bonuses, there’s most often a service charge — typically $2 to $5 — for mall cards and bank cards.
“I don’t buy gift cards when they charge a fee,” said Fran Johnson of Brockton, who is giving gift cards to local restaurants, including Bertucci’s, Stoneforge and Bugaboo Creek.
Gift card sales are about the same as a year ago at Stoneforge, according to spokesman Larry Vaillancourt.
He said the fact they are honored at the company’s four locations — Raynham, Easton, Plymouth and Foxboro — and that they never expire makes them appealing.
At the Abington Ale House, gift card sales are up 10 percent, general manager Mike Costa said, citing the company’s decades-long presence in Abington, West Bridgewater and Kingston, where the cards are honored. But people are economizing.
“Though we’re doing a lot more gift cards, they’re in lower amounts,” he said. Instead of buying cards for $50 or $100, more folks are buying $25 cards.
Aria Day Spa in Brockton is also offering a gift card package, a $20 discount on a future massage with a $200 purchase, said Ana Almeida, director of the Belmont Street spa.
Gift cards or gift certificates are also available at the Fuller Craft Museum in Brockton where sales are holding steady, spokesman David Bloodsworth said.
There, gift baskets are offered for $25 with a museum pass purchase, and gift certificates are offered for workshops that are regular features.
Enterprise writer Elaine Allegrini may be reached at email@example.com.