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Consumers Seek Bargains Rather Than Gift Cards

The National Retail Federation predicts a 5.6% decline in sales of gift cards this holiday season, the first drop in six years. (Sales of gift cards are expected to hit $24.9 billion this season, down from $26.3 billion last year.)

Fewer people said they planned to buy gift cards this year�53.5% compared with 56.6% in 2007. Many said they preferred to buy an item on sale instead of a gift card, which doesn�t go on sale.

The average amount shoppers spend on holiday gift cards is also expected to decline by 5.7% to $147.33 according to the National Retail Federation.

A drop in gift card sales could have a significant impact on retailers, who now restock their shelves after Christmas in anticipation of shoppers coming in to redeem gift cards.

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