NEW YORK - Gift cards aren't just last-resort purchases by baffled holiday shoppers anymore. They're becoming the presents of choice for Americans who want to help friends and relatives.
Spending on holiday gift cards may climb 25 percent to $35 billion this year, according to Archstone Consulting LLC, boosted by cards that aid consumers contending with higher food and fuel costs and the deepest housing slump since 1991. That tops some estimates for website holiday sales.
Gift cards that pay for gasoline at Exxon Mobil Corp. stations, groceries at Wal-Mart Stores Inc., or medical bills through health-insurer Highmark Inc. will help increase the category to 5.9 percent of total US holiday spending this year, according to Stamford, Conn.-based Archstone. That's up from 4.9 percent in 2006.
"The practical usage of gift cards is the biggest story this year, due to economic fears of many consumers and tighter budgets," said Heather Dougherty, director of research at Experian Group Ltd.'s Hitwise in New York, which measures Web traffic. "We see people who are searching for things like gas and grocery gift cards."
Gift cards represent one of the few bright spots for retailers this holiday season. The National Retail Federation in Washington says total retail sales may increase 4 percent in November and December, the smallest gain in five years.
"We've seen a cultural shift in how we view gift cards, from a thoughtless, lazy person's gift to a thoughtful gift," said Scott Krugman, a National Retail Federation spokesman. "It's becoming a practical gift for practical purposes."
Gift card sales also have been spurred by their increased availability in supermarkets and drugstores. Cards for Applebee's restaurants, Omaha Steaks, Visa Inc., and AMC movie theaters were racked at a Duane Reade Inc. drugstore in New York last week.
Prepaid debit cards such as those from Visa and MasterCard Inc. may be the most popular type of gift card this year, Archstone estimates, accounting for 16 percent of the total market. Cards for discounters such as Wal-Mart and food and beverage providers such as Starbucks Corp. probably will be the next two most popular categories, Archstone says.
Gift cards from credit card companies are gaining popularity because they can be used for many purposes, including living expenses, Hitwise's Dougherty said.
Gasoline station operators including BP PLC, Chevron Corp., and Exxon Mobil offer cards. Shoppers can buy gift certificates for customers of Portland General Electric Co. in Portland, Ore., and Equitable Resources Inc. in Pittsburgh to pay utility bills.
Highmark, a Pittsburgh-based health insurer, on Nov. 1 introduced the Healthcare Visa Gift Card. The card allows people to pay for items such as prescriptions, Lasik eye surgery, facials, gym memberships, and fertility clinics.
"It gives the liquidity of cash, but it's more targeted to that recipient's needs," said Kim Bellard, a Highmark vice president. Interest in the card was "higher than expected," he said, declining to disclose details.
Marie Kubovsak learned about the healthcare gift card at the doctor's office where she does billing. She bought a $25 card last month as a Christmas present for a co-worker with fibromyalgia to help her cover copays or prescriptions.
"In a day and age where money is tight and everything, it's better to buy something that they're going to use," said Kubovsak, 53, of Reading, Pa.
Some websites offer philanthropic gift cards. TisBest.org allows card recipients to choose from 220 charities for a donation. Since the Nov. 1 introduction, the website has received about $170,000 for donations, said Erik Marks, founder of the Seattle-based site.
