It wasn't so long ago that only the grumpiest, most eccentric bachelor uncles could get away with slipping a $20 bill into a Christmas or Hanukkah card and calling that a present. Everyone else was expected to head to malls and stores to choose something "thoughtful." In reality, that meant many men received socks, handkerchiefs and alarming power tools that ignored the recipients' do-it-yourself skills to an extent that seriously endangered both home and health. Meanwhile even larger numbers of women were opening shoddily wrapped boxes containing cheap perfume, household equipment ("But you said last month you needed a new plastic dustpan set. That wasn't a hint?") and wildly inappropriate and ill-fitting lingerie.
Plastic omnipresentSo, perhaps it's a sign that we're getting smarter in our present-buying habits that the 2012 holiday season likely saw more gift cards given than ever before. Either that, or we no longer feel wealthy enough to throw away money on items we suspect will end up, unused, in basements, backs of closets or the trash. Whatever the cause, gift cards were almost certainly big business over the recent holidays. When, back in October, pollsters BIGinsight asked consumers about them on behalf of the National Retail Federation an amazing 81.1 percent of respondents said they planned to buy at least one. These indicated they intended to spend an average of $156.86 on such cards, with each worth, again on average, $43.75. No wonder the NRF expects total spending on them to have hit $28.79 billion by the season's close.
Holiday spending moderateIt may not be just in our present-buying habits that we're showing better judgment: our overall holiday spending might not have been as high as was originally anticipated. ShopperTrak, an analyst that measures foot traffic and sales in retail outlets, had to downgrade its estimate of 2012's holiday sales, which it had first published in September. In a Dec. 19 press release, it reduced its forecast of the amount sales would grow compared to 2011 to 2.5 percent from 3.3 percent. This seeming moderation in holiday spending was borne out by another survey, this time from ING Direct, which will be renamed Capital One 360 during 2013. This found that:
- More than 75 percent of respondents were using cash or debit cards to pay for their holiday shopping.
- Some 63 percent planned to hold their seasonal spending at the same level this year as last.
- As many as 60 percent said they intended to begin 2013 debt-free from the holiday spending season.
Credit card companies in mourning?Wow. If those last three findings are for real (and, let's face it, not everyone's entirely honest when asked by total strangers about their personal finances), then the thrift and caution Americans discovered after the credit crunch may not have entirely dissipated. That's very good news for those individuals and families who are avoiding the downsides of debt.
However, it's less good news both for the economy, which could use a real boost from consumer spending, and for credit card companies, which increasingly rely on the interest from their customers' revolving balances to keep their profitability buoyant.