BUSH-PETRO-SUBPRIME-HEALTHCARE ECONOMY AND CHRISTMAS: GEE, WHO KNEW?
The preliminary numbers suggest the modest increase in holiday retail spending has not kept pace with inflation--AND, that's giving the brick and mortar retailers the benefit of being lumped in with their successful internet cousins. (The Brick and Mortar numbers are going to be much worse).
Let's see: Three dollar gas, otherwise successfully employed guardsmen and reservist deployed and thus finanacially depressed, the bottom out of urban real estate and the National Debt Clock's bearings burned out. Did anybody see anything different coming?
posted by UMRBlog @ 20:15
11 comments
11 Comments:
Woe, tales of woe and consternation. But. Wait.
What also occurred and mentioned less prominently if at all, is that the sale of gift cards went out the door at a figure of $26 billion, an increase over last year of 42 percent. 26 billion and up 42 percent. Gift cards are not figured into sales until they are redeemed so it is very possible, very likely in fact, that this year could see retailer sales going higher than they projected.
Much hand wringing over how poor sales of clothing has been this season. Can you say gift cards? How many shoppers really like trying to pick out clothing items for anyone on their gift list under 3 years old? Give them a gift card and let them pick out what they want. And that is what it appears has happened. Those who report these dire stories so often wrong and maybe they'd learn they have to wait until the gift cards come through. $26 billion. Up 42 percent.
Every year around this time we listen to these tales of woe. Then when we stop paying attention to Christmas, out come the stories of how good the retail season has been thanks to gift cards.
Well, yes and no.
Mr. Bankcard cannot tell the difference in online purchases of goods and cards. Thus, when they tell you the cards don't count till they're negotiated, it's only true of B&M's. Given that the B&M's were wheezing anyhow, that'll get them all the way back to "disappointing".
I would be interested in how our readers' gift card purchases were split.
I bought about 40% of my gift cards at B&M stores and about 60% on line. I'm guessing that the younger people buy a much higher percentage online. My brother did 100% gift cards and music credits online--that's 100% of his GIFTS, not of his gift cards.
Please feel free to drop in and share your percentage.
BTW, anon, I hope you're right. If the whole country is wheezing, it usually starts on both coasts and meets right here in the Basin, the we get the worst and longest of it.
TYFCB
Mr Bankcard can tell the difference online as well as B&M. Technology makes this possible. ALL your gift card purchases do not count as sales until they are redeemed.
I have a call in to my only friend who's an internet magnate. My belief is that capability is pure propaganda. I know that was true in '06. Perhaps that has changed and the bankcard can now look inside the "basket" to determine gift cards. If so, that is new.
I know the card systems all SAY they can do that but they formerly lacked that capability online and I haven't seen any change in the online interfaces which would suggest this capability is upgraded.
While appreciating your input, I remain agnostic on this point.
TYFCB
The retailer, whether online or in the mall, knows what it has sold. They know if they sold a gift card, it doesn't count as sales until it is redeemed. It's just that simple.
If by "retail spending" you mean retail sales, then Mr Bankcard really has no say in any of this. 3:54 is right, gift card purchases do not count as sales until they are redeemed.
1717, 1913
The early reports are not from retailers. They are from MasterCard. The issue is whether MC can look inside baskets in online purchases--not whether "the retailer" knows or counts it.
For current purposes, it makes no difference what the vendor knows or doesn't know or counts or doesn't count.
Later, when the chamber of commerce numbers come out, that will be relevant, not when you're using bankcard numbers.
Simple as that.
The MasterCard report is a broad gauge of consumer spending and includes estimates for spending by cash and checks only.
Exactly,
It makes no distinction between items and gift cards in online baskets, it just records expenditures.
It then makes an estimate of cash and checks using a ratio based on experience in B&M stores.
The merchants individually can tell how much they have outstanding in cards because they have to be accounted. The card company cannot, particularly online. It just measures the amount of the basket.
TYFCB
UMR
Do you buy any items online with cash and checks?
1054,
I never suggested I, or anyone else, does or did. Has nothing to do with the basic point above. The cardmeister cannot look into the basket. Pretty simple concept, really.
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