YONKERS, N.Y., Nov. 12 /PRNewswire-USNewswire/ -- Consumer Reports
today unveiled its latest public education campaign, warning holiday
shoppers of the pitfalls associated with the ubiquitous gift card. Consumer
Reports' public education campaign kicks off on Tuesday, November 13th with
a full-page ad in the New York Times advising shoppers that unredeemed gift
cards can be easy money for retailers and lost money for consumers.
TowerGroup estimates that nearly $8 billion was lost last year due to
unredeemed value, expiration or loss of gift cards.
Consumer Reports will also launch a holiday shopping hub on
www.ConsumerReports.org that will offer tips on how to avoid gift card
snags and provides a place for consumers to share their stories about
problems with gift cards.
Consumer Reports is also releasing its latest survey, which finds that
27 percent of gift card recipients have not used one or more of these
cards, up from 19 percent at the same time last year. And among consumers
with unredeemed cards from last season, 51 percent have 2 or more.
This latest effort by Consumer Reports follows in the tradition of last
year's public education campaign which advised shoppers to skip the
extended warranty. Last year, the organization took out a full page ad in
USA Today that was rebutted by a full page ad one week later from the
Service Contract Industry Council.
"We're building on our successful campaign from last year to inform
consumers about the latest holiday pitfall to avoid," said Jim Guest,
president and CEO of Consumers Union, nonprofit publisher of Consumer
Reports. "As an organization that doesn't take advertising, we're using
this venue as a way to educate consumers."
Gift cards are expected to be a major component of holiday giving with
estimates putting sales at more than $100 billion in 2008. And according to
Consumer Reports' survey, 62 percent of consumers are planning to buy gift
cards this season. Consumer Reports' survey also found that when the time
came for consumers to redeem their gift card, the majority of consumers
also spent their own money, with 60 percent spending more than the value of
"It's easy to understand the appeal of gift cards. They're the perfect
no-muss, no-fuss gift for the finicky family member or friend. It's a
no-brainer..." said Tod Marks, senior editor at Consumer Reports. "But
gift-givers and recipients alike need to be aware of the pitfalls and make
sure that precautions are taken so that the recipient gets the gift and not
What Happened to Those Unredeemed Gift Cards?
According to Consumer Reports' survey, more than six in ten shoppers
plan to purchase gift cards this holiday season. But for the 2006 holiday
season, 56 percent of respondents received gift cards and nearly a year
later, 27 percent of gift card recipients have not used one or more of
these cards. Among the reasons that gift cards have not been redeemed:
-- Over half (58%) of consumers indicated not having the time; followed
by not finding anything they wanted (35%).
-- Nearly one-third (32%) of respondents who have unused cards from last
holiday season did not use their gift card because they forgot about
-- A good proportion of consumers (7%) will never redeem their gift cards
From last season because the card is lost (3%) or expired (4%).
What Can Consumers Do?
Gift cards seem like a perfect solution to the problem of what to give
this holiday season. Gift cards are offered by banks, shopping malls,
retailers, airlines, restaurants, hotels, Web sites, and even state parks.
But Consumer Reports offers the following tips for gift card-givers to help
ensure that the gift is enjoyed by the recipient:
-- Think twice about bank cards. While bank cards generally can be used
at more retailers than store cards, they're often loaded with
fees and restrictions.
-- Check the merchant's prices. It's annoying to get a $25 gift card
for a store that sells little at that price. When selecting a
store-issued card, find out how much things generally cost and get
a card with at least that value.
-- Send along the receipt. Some issuers require the original receipt to
Replace a lost, stolen, or damaged card.
For gift card recipients, these are some of the tips that Consumer
-- Register it. Some cards must be registered with the issuer,
especially if the card is used for purchases online or by phone.
-- Spend it quickly. Use the card as soon as possible, especially if it
Expires or has a monthly maintenance fee.
-- Spend it to the last penny. If the card balance gets so low that
there's nothing to buy, ask a merchant to do a split-tender
transaction. That involves using the remaining card balance for part
of the transaction and another form of payment for the rest.
-- Hold on to it. Don't throw out the card when the balance is zero.
Some merchants require it for returns.
The Consumer Reports National Research Center conducted a telephone
survey of a nationally-representative probability sample of telephone
households. 1,000 interviews were completed among adults aged 18+.
Interviewing took place over October 18-21, 2007. The margin of error is
+/- 3% points at a 95% confidence level.
SOURCE Consumer Reports