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23/12/2009 -
Not only are customers relying on gift cards more than ever this holiday season, but now retailers are relying on them too, knowing that they can drive traffic and sales - for businesses whose merchant services include gift card processing - after the holiday rush is over. Many retailers are ramping up their promotional gift card offers this holiday season, providing gift cards to customers who spend a certain amount in an attempt to get them back in the store come January, the Boston Globe reported.
"It's all about driving traffic back into the stores," Marshal Cohen, chief retail analyst for consumer market research firm the NPD Group, told the Globe. "These gift cards are an alternative to deep discounts, and more retailers are getting on board."
Offering gift cards can be particularly beneficial to merchants, as research has found that consumers spend more with gift cards than with any other form of payment processing, and that many gift cards go unredeemed. It can also smooth out cash flow and help manage post-holiday inventory.
Luckily for merchants, gift card sales are expected to increase this year by potentially up to 50 percent, Mercator Advisory Group recently reported.
