As they do every year, shoppers are flocking to gift cards as a means of dealing with a fixed budget. But one thing not often considered is how this affects retailers. Surprisingly, it's in a more positive way than you might think.

According to a recent survey by Harris/Decima, many shoppers redeem gift cards during the month of January, right after Christmas, and half of them will spend more than the value of the card. Thus, this helps to keep the momentum going after the busy holiday season winds down.

What's more, gift cards can be leveraged to gather customer data, and better target loyal customers. According to Harris, a connection with customers can overcome price concerns, which means building a better connection can help retailers avoid having to resort to deep discounts.

Sixty-two per cent of Canadians say they are happy to provide their personal information in exchange for an incentive; and 21% would register online to protect a gift card from theft or loss. A quarter of respondents aged 18-34 would even be willing to give their cell phone numbers to register a gift card.
In all, 23% of Canadians say they'll buy gift cards instead of giving personal gifts or cash.
The environment plays into the gift card phenomenon as well: 55% say they'd be willing to pay more for a gift card made from environmentally-friendly or recycled materials versus plastic. A few companies make such cards, including Givex, which commissioned this study, and Innovative Graphics Group's EnviroCard http://www.marketnews.ca/content/index/page?pid=4291.
The results are based on a telephone survey of 1,013 Canadians conducted in early October.

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