Fewer gift cards this holiday season

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NEW YORK (CNNMoney.com) -- As consumers try to pinch pennies this holiday season, they are going to spend less money on gift cards than last year, according to a report released Tuesday.

Gift card sales will fall almost 6% this holiday season to $24.9 billion, down from $26.3 billion last year, according to the National Retail Federation's sixth annual Gift Card Survey, conducted by BIGresearch.

Fewer shoppers plan to purchase gift cards this year - 53.5% compared with 56.6% in 2007. And if they do purchase gift cards, shoppers are going to put less cash on them, according to the survey. The average amount that shoppers plan to spend on gift cards in 2008 fell to $147.33 from $156.24 in 2007.

"Since gift cards never go on sale, some price-conscious shoppers will be passing up gift cards in favor of holiday bargains," said NRF President and CEO Tracy Mullin in a written statement.

Nearly 11% of shoppers interviewed for the survey said that the main reason they plan to buy fewer gift cards this holiday season is because they want their holiday shopping dollars to go further by buying gifts from the sale rack.

Of those who will be spending money on gift cards, the biggest spenders will be men and consumers who are a bit older. Men will spend an average of $156.98 on the cards and Americans over age 45 will spend $168.02 on average on gift cards this season.

But the gift card spending pullback comes at a time when a gift certificate is what a majority of consumers want, according to the NRF. The trade group's first holiday spending survey released last month, showed that 54.9% of spenders want to receive a gift card, up from 53.8% last year.

"Most consumers have been holding back on spending for themselves all year long and would love nothing more than receiving a gift card that would let them buy whatever they want," said Phil Rist, Vice President of Strategy for BIGresearch in statement.

The pullback in consumer gift card spending will catch up with retailers in the first months of the coming year, when shoppers hit stores ready to cash in on their holiday gift cards. "Retailers may need to make minor adjustments to holiday plans as fewer people may be hitting the stores in January to redeem gift cards," said Mullin.

The survey was conducted by BIGResearch for the National Retail Federation and polled 8,758 consumers between November 5-11, 2008.