NEW YORK (MainStreet) — Giving and receiving physical gifts could be on their way out, as gift cards in other forms continue to gain in popularity.

Consumers are eschewing the long-held tradition of buying and receiving gifts and simply resorting to gift cards. The market for gift cards has grown exponentially with 62% of shoppers who said they would like to receive a gift card, the eighth year this item was requested as a present, according to a survey by the National Retail Federation, the Washington, D.C.-based retail trade group.

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Despite the surge in popularity of gift cards, consumers are still in a conundrum and 30% feel too guilty asking for them, according to a survey by CashStar, the Portland, Maine digital gift card company. The top two reasons are apparent - 62% of people don’t like to ask for anything while 61% feel that requesting one is akin to asking for cash.

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Shoppers no longer feel guilty in purchasing what was often viewed as a highly impersonal item designated mainly for acquaintances. The NRF said the average person buying gift cards will spend $172.74 this year, up from $163.16 in 2013, bringing the national total to reach $31.74 billion. Shoppers will spend an average of $47.87 per card, up from $45.16 last year. Total spending on gift cards has increased 83% since the NRF began tracking consumers’ intentions to buy gift cards as holiday gifts in 2003.

“But we found some guilt still resides on the side of the recipient, who feels guilty asking for gift cards," said Ben Kaplan, CEO of CashStar. "It’s time for consumers to get over gift card guilt.” 

The allure of gift cards is understandable since it allows receivers to buy something they really want with 77% who expressed this sentiment while 66% of respondents said they could buy items they actually need, the CashStar survey showed. A majority of people (51%) said the cards helped them purchase an item that they wouldn’t otherwise have been able to afford.

The guilt factor in buying gifts for yourself declines rapidly when shoppers use gift cards, with two out of three people who felt this way. Younger shoppers were even more eager to admit to this sentiment with 79% of 18- to 24-year-olds and 78% among 25- to 34-year-olds who agreed.

Requesting a gift card is still frowned upon and extremely impolite, said Diane Gottsman, an etiquette expert and the owner of The Protocol School of Texas in San Antonio.

“A gift is not an obligation, and it’s not uncomfortable to ask specifically for a gift card or cash,” she said.

The only exception is when you are discussing this matter with close family or friends who have directly asked you would like this holiday season.

To avoid any gaffes, tell the other person you are saving for a particular item, such as luggage for an upcoming trip or some updated work clothing and that a gift card would be a welcome gift as you can buy exactly what you need, Gottsman said.

While many people believe that giving a gift card cannot replace a personal item, you can remedy it by purchasing a gift card to stores that have multiple options of merchandise or a store that you are certain the recipient is a regular customer, she said.

“Thoughtful gifts that will be used will be appreciated,” Gottsman said. “Gift cards are also easy to send, rather than taking large gifts from one city to the other over the holidays.”

Tread carefully when you are shopping and avoid going on a spree and purchasing gift cards for everyone in your immediate circle. Only give a gift card to someone that you feel certain will appreciate it and never as the main gift to a new girlfriend or your spouse, she said.

“Always add a handwritten note to a card, and if it’s going to be given to someone you have a romantic relationship, give it as a side gift rather than the main gift,” Gottsman said.

Since you can personalize digital gift cards with photos, videos and special messages, the perception of gift cards being impersonal gifts is declining and is being viewed as a practical gift.

“As the most requested gift item for eight years in a row, we’re sure there will be plenty of happy individuals this holiday season who can look forward to treating themselves to something shiny and new come January when retailers start to offer promotions on fresh new merchandise,” said NRF CEO Matthew Shay.

--Written by Ellen Chang for MainStreet

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