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Gift-card effect? Not so much . . .

Posted By Barry Ritholtz On January 4, 2005 @ 6:02 am In Economy | Comments Disabled

The $17 billion gift card addendum –about 8% of holiday sales — turns out not to cause a "January effect" as expected for the nation’s retailers after all.

So says the well regarded Sanford Bernstein Investment Research. "Although gift cards have been hailed for providing a "positive ‘January effect,’ actual results suggest this is more hype than help."

"Given a large percentage of gift cards are typically redeemed during the last week of December, the majority of the impact of an increased number of gift cards is to shift December sales from pre-Christmas to post-Christmas, not significantly impacting the overall monthly result," the broker said.

Furthermore, Bernstein said this year’s gift-card sales figures are going up against a tough comparison in the form of 2003′s strong results, meaning the overall effect will be nominal.


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Source:
Holiday gift-card effect seen as limited [1]
Dan Burrows
CBS MarketWatch.com, 9:54 AM ET Dec. 31, 2004
http://cbs.marketwatch.com/news/story.asp?dist=&param=archive&siteid=mktw&guid=%7B4A74B7ED%2D00DB%2D481C%2DAB7D%2D1DE0A4DF6F60%7D&garden=&minisite=


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[1] Holiday gift-card effect seen as limited : http://cbs.marketwatch.com/news/story.asp?dist=&param=archive&siteid=mktw&guid=%7B4A74B7ED%2D00DB%2D481C%2DAB7D%2D1DE0A4DF6F60%7D&garden=&minisite=

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