Wednesday October 21, 11:34 PM
reworked copy
BANGALORE, Oct 21 (Reuters) - After he recently appeared on ABC's reality show SHARKtank to pitch his business to potential investors, sales at Kwame Kuadey's discounted gift cards website GiftCardsRescue.com tripled to $45,000
a month.
Online sites offering discounted gift cards like the one Kuadey runs from his apartment in Ellicott City, Maryland are fast becoming a haven for bargain hungry shoppers looking to stretch every dollar.
Gift cards, which fell out of favor last year as recession weary consumers preferred to take advantage of massive markdowns on offer, are slowly making their way back into customer wallets.
Taking a cue from last year's holiday season, retailers have been maintaining leaner inventories and are expected to offer fewer discounts this year, which should boost gift card sales and help the once popular gift option regain its place on consumers' holiday shopping lists.
'We are not going to see the last minute panic discounts that we saw last year. That was largely a result of leftover inventory that retailers just couldn't plan for,' National Retail Federation (NRF) spokesperson Kathy Grannis said.
Stacy Janiak, vice chairman and U.S. retail leader for Deloitte (?) said she expects more consumer friendly terms on gift cards from retailers and card companies this year.
(((As per NRF's 2008 holiday gift cards survey, nearly 10 percent people bought fewer gift cards because they were concerned about card expiration or added fees.))) - Unclear
In a bid to revive its gift cards business, American Express Co said last month that it was getting rid of the monthly fees on all its gift cards.
Sears will offer special 'Christmas Club' cards between now and Nov. 14 that never expire and can be used to buy, 'anything from fleece to food to tools to electronics to appliances.'
Department store retailer J.C. Penny Co Inc is looking to lure more shoppers by offering a crystal clock or crystal jelly jar worth $5.99 or a ceramic mug set or plate/spreader set for $3.99 with a gift card purchase of $25.00.
(((Smaller rival Kohl's 'Gift Card Centers' will offer gift cards from other retailers like Best Buy (NYSE: BBY - news) , Apple (NASDAQ: AAPL - news) iTunes, Applebee's, Barnes & Nobel, Starbucks (NASDAQ: SBUX - news) , Olive Garden, and Red Lobster.))) - maybe you can take this graf out
LOOKING FOR DISCOUNTS ELSEWHERE
(Trading in gift cards is also beginning to have a...) - some kind of preamble.
Mountain View, California-based PlasticJungle.com, another discounted gift cards site, has about 47,000 registered users and has seen revenue grow 50 percent quarter over quarter, helped by a 20 to 30 percent jump in site traffic every month, Kristin Cunningham, director, Marketing said.
'People get gift cards all the time that they don't want. And its probably from a store they don't like or in today's economy they'd rather get cash for their gift cards so they can buy what they really want,' GiftCardsRescue.com's Kuadey said.
Plus, cash-strapped consumers are buying up discounted gift cards on these sites and using them to for shop at big box retailers like Wal-Mart Stores Inc, Target Corp and Home Depot Inc (NYSE: HD - news) , at supermarket chains like Safeway Inc (NYSE: SWY - news) or even at Starbucks Corp.
Site like Kuadey's allows customers to sell, buy or swap gift cards.
Business volumes at GiftCardsRescue.com (yes?) have jumped 200 percent since the second quarter, and are expected to rise further after a recent deal with Amazon.com (NASDAQ: AMZN - news) which will give customers the option to either cash their gift cards or swap them for an Amazon one.
Online auctioneer eBay Inc (((check Ebay (NASDAQ: EBAY - news) 's release yesterday))) also saw a spurt in sales of smaller denomination cards and coupons from Starbucks, Kohl's Corp and Lowe's Cos Inc in the last three months, and expects the number of gift certificates/cards sold during this year's holiday season to likely outpace 2008 holiday sales.
MIXED JINGLES FOR GIFT CARDS
Still, the 2009 holiday gift card market in the United States is expected to trend between staying flat at $24.9 billion to falling 5 percent, a recent survey by Archstone Consulting said.
While Americans are still buying gift cards, their average value has dropped $6 or 11.5 percent to $46, the survey pointed out.
(((Gift certificate prices on eBay have averaged $37 over the last three months, eBay pop culture expert Karen J. Bard said.))) - what's he context
Deloitte's Janiak also expects gift card sales to be flat to down this holiday season, based on Deloitte's earlier prediction of flat 2009 U.S. holiday spending.
'Also, consumers as they did last year will be looking for promotional value when they are out shopping for the holidays. So they may be able to get more for their money by buying an actual gift versus putting those dollars on a gift card,' Janiak said.
America's Research Group CEO Britt Beemer also sees gift card sales flat to down 5 to 7 percent this year.
However, NRF's Grannis said the popularity of gift cards would continue to increase.
'I think a lot of consumers will go back to their old ways and look at gift cards as a great way for providing convenience to the person you are giving the gift to,' she said.
(((Last year, gift card shoppers struggled with slumping home values, volatile energy prices, rising unemployment and a credit crunch, which curtailed their ability to spend.
Barclay's analyst Meredith Adler said recently that she expects gift cards to do well this year, if there's not a lot of discounting at retailers.))) - Think we can take this out.
On Safeway's latest third quarter results conference call, its unit Blackhawk Network, which provides third-party gift cards said gift card sales had risen 21 percent during the quarter.
Coffee chain Starbucks' whose gift card sales rose 8 percent to $26 million last year, despite weakening net sales, expects to sell lots of gift cards this year too.
'In a lot of ways last year was the holiday that never happened. We don't think that is going to hold true this year. We think people want their Christmas back,' Terry Davenport, Starbucks' senior vice president of marketing told Reuters.
((Need to cut this to about 90 lines, Shradhha))
(Reporting by Shradhha Sharma in Bangalore) Keywords: GIFTCARDS/
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