Consumers have been turning away from credit cards and toward cash and debit alternatives in recent months, and a new report suggests this could mean a shift away from prepaid gift cards as well.
After nine consecutive years of growth, recent research shows that gift card use is slowing.
Sales for gift cards are expected to drop $86.2 billion, an 11 percent decline from peak sales in 2007, according to SmartMoney. Shoppers are looking to avoid expiration dates, inactivity fees and other charges.
Third-party sellers of the cards are reporting a 1,000 percent increase over last years figures, the news source says. These cards are even being offered at discounts, with consumers getting more than a dollar per dollar on some transactions.
“People would rather use the cash anywhere they like than be restricted to a specific store,” Dan Horne, professor of marketing at Providence College, told Smart Money.
Recent legislation attempted to close these loopholes on credit cards and gift cards. Despite this, many consumers seem to be deciding against purchasing the cards as part of their upcoming holiday shopping.