Gift card activations/redemptions down in December 2010

According to First Data Corp.'s SpendTrend analysis of the closed-loop gift card segment for December 2010, overall dollar volume growth in card activations was 2 percent, down from 8.6 percent in the previous month. First Data attributed this slowdown to retailers offering customers deep discounts on goods during the 2010 holiday season, as well as severe winter weather in late December, which suppressed dollar volume growth.

Dollar volume growth in activations for the specialty retail sector was especially hit, showing a negative 1.1 percent in December, after posting a 7.3 percent increase in November, First Data said. In that same period, First Data reported redemption dollar volume growth among specialty retailers declined to a minus 1.5 percent in December, although it stood at a minus .4 percent in November.

Another factor at play that suppressed the December numbers was that consumers purchased more of their holiday gift cards earlier in the holiday season, First Data said.

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