It's already February, and I still haven't redeemed many of my family's holiday gift cards.
In fact, families like mine are one reason for retailers' January slump.
Last week, Wal-Mart (WMT) blamed slow gift-card redemptions as one cause for its measly 0.5% increase in January same-store sales, or sales at stores open at least a year, when excluding fuel sales.
A lag in gift card redemptions is affecting retailers across the board this year, according to Brian Riley, senior analyst with TowerGroup, a financial-services research firm in Needham, Mass.
Gift card redemptions typically surge during after-Christmas sales, and then again in January. But this January's surge is not as strong as last year's, he says. Retailers don't count gift cards as revenue until consumers use them, because many states consider cards that aren't ultimately redeemed as unclaimed property.
I have a simple solution to help stimulate the economy.
Next time, give cash.
My husband, Ben, insists that cash is king when it comes to gifts -- even to the annoyance of some relatives, who think cash gifts lack imagination and even border on gauche.Riley, of TowerGroup, says gift cards that languish in a kitchen drawer for more than three months often remain unused for even longer.
Wal-Mart also revealed a disturbing trend -- many consumers are redeeming cards for food, instead of plasma televisions. That's a sign, says Riley, of hard times and tight budgets. But if people choose to spend their cards on toilet paper in the current economic atmosphere, then cash works just as well.
I also think there's more to this picture than the economy.
Gift cards are now so ubiquitous that they're supplanting other payment forms such as cash and credit. Major retailers routinely offer cards at their checkouts. The cards even dangle from kiosks in local supermarkets.