Reply #20: Stores pin hopes on gift-card effect

[UpInArms]

http://www.chicagotribune.com/business/chi-0412280238dec28,1,7739823.story?coll=chi-business-hed

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Steep discounts at major retailers and consumers flush with a record number of gift cards are expected to boost sales during the last week of December and put a positive spin on a modest holiday shopping season.

Merchants got started Sunday with a barage of tempting offers. Marshall Field's advertised discounts as steep as 80 percent while Sears, Roebuck and Co. offered an extra 20 percent off already-reduced clothing, for savings of up to 60 percent.

The strategy seemed to work. Sunday could go down as the busiest day after Christmas in five years, said Britt Beemer, chairman of America's Research Group.

"The stores were packed," he said. "You saw people dressed in their Sunday clothes going to early-bird specials."

Retailers are having a hard time getting a handle on how business will wind up because of shoppers like Wendy Meadows, who bought and received more gift cards this year.

Gift cards, sales of which reached record levels this holiday, introduce an element of uncertainty into the retail landscape.

For one thing, they're not counted as sales until they're redeemed. Also, shoppers who do use them sometimes end up spending as much as 40 percent more than the face value of the card.

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