Business

Gift cards a boon for local businesses

Though some consumers equate giving or receiving gift cards to Grandma's fruitcake, local businesses say they are an important means to attracting new customers, satisfying demand and receiving "free money."

Sam Connelly, general manager of Mead's Corner coffee shop, at Douglas and Emporia, said gift cards are "so big during Christmas," especially among consumers who don't know what gifts to give to people.

"We are selling a whole lot more of them," Connelly said of gift cards during the holidays. "It's really good for us."

Holiday shoppers nationwide this season will buy almost $25 billion in gift cards, averaging about $40 a card.

In a National Retail Federation survey of consumers asked to choose their most desired holiday present, 55.2 percent of adults chose gift cards.

That preference has been nudging upward since 2006 as some other major categories, such as clothing and video games, have declined.

Holiday shoppers buy an average of almost four gift cards each, according to the NRF.

Men and women aren't equal in their love of receiving gift cards, though. Forty-nine percent of men preferred getting books, CDs, DVDs, videos or video games, while 46.6 percent favored gift cards. But 63.4 percent of women preferred gift cards.

Broken down by age, 63.4 percent of 25- to 34-year-olds preferred to receive gift cards.

This season, unlike in the past, card recipients are more likely to spend on basics rather than save them for extravagant purchases, said Dan Horne, an associate professor of marketing at Providence College in Providence, R.I.

"How they'll be redeemed will shift, and they'll be spent for things like underwear and toothpaste," he said.

Americans might be spending less on cards, but Kansans and Wichitans are demanding them.

Demand is what prompted Cox Kansas to begin offering gift cards last year, said Lynne Sangimino, vice president for sales and distribution.

"Customers kept asking us for gift cards," she said.

Sangimino said that since Nov. 25, Cox Kansas has sold "thousands of dollars of gift cards."

The gift cards can be used to pay for cable service, pay-per-view events or electronic accessories it sells in its stores.

She said that although customer demand prompted Cox to begin selling gift cards, it was part of the company's strategy to sell them with the launch of its retail stores locally.

"It made sense for us to begin selling gift cards... to be a real retail environment," Sangimino said.

Mead's Corner's Connelly, who said he previously worked in management positions at Target and Starbucks, said a big benefit of gift cards is those that are purchased but go unused.

"There's always a percentage of people who end up not using their gift cards," he said. "That's just like free money."

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