Gift card redemption is expected to be a key driver of retail sales this month, a welcome relief to stores after signs that consumers were tightening their belts after the holidays. But there’s conflicting evidence on whether increased gift card sales before the holidays will be the boon retailers hope, USA Today reports. The International Council of Shopping Centers predicts only 36.3% of gift cards will be redeemed this month, down from 45% last year and 46.4% in 2009.
“Teens like to rush out and redeem their gift cards the week after Christmas,” Phil Rist of consumer intelligence firm BIGresearch told USA Today. “More practical adults will hold on to them” until they can get good bargains.
Tolu Babalola, spokesman for GiftCardRescue.com, which buys unwanted gift cards and lets people exchange them for others, believes more consumers are putting off redemption because of new federal gift card rules. The rules limit expiration dates to five years after purchase and prohibit dormancy fees for non-use until after the first year.