There’s been some buzz recently that customers might not be able to redeem gift cards because of store closures and bankruptcies. That might be true with some retailer branded cards, but largely is not a problem. In any case, to allay fears, Jones Lang LaSalle has taken the step of guaranteeing its gift cards.
The company, which operates 120 malls and shopping centers, said it will guarantee gift cards between Friday and Jan. 21 sold by national retailers that are its tenants, if they declare Chapter 7 bankruptcy.
Cards that no longer hold value will be replaced with a mall gift card of equal value by Feb. 1, the company said. If they cannot verify the value of the card, Jones Lang LaSalle will offer a $20 mall card, unless the face value shows a lesser amount. Mall gift cards are issued by banks, rather than retailers, the company said.
Jones Lang LaSalle said it issued the pledge in response to an e-mail that is circulating, which claims gift card buyers may get stuck holding worthless cards if chains close their doors.
Dwellgo also looked at the email that’s been circulating, which lists a lot of retailer names and claims consumers won’t be able to redeem gift cards at many of them.
The email that we received noted massive retail store closures, yet after further examination contained both truth and sometimes total lies. As well, the stores listed had already made announcements of bankruptcy or store closings prior to the 2008 financial crisis.
What remains unknown at this time is how the events of the downturn and credit crisis over the last 6 months will affect retailers moving forward. We’re definitely hearing comments ranging from caution to outright worry from our Commercial Real Estate brethren (and I’m speaking about the US, not specifically Austin here).
A final note on giftcards for retailers who have announced bankruptcy…Federal law does allow for companies to stop honoring gift cards when they file for Chapter 11 bankruptcy protection, but of course not all businesses do. Gift cards may continue to be accepted while the retailer reorganizes or card redemption may be temporarily suspended and resumed later. Financial experts have stated that to be safe, it’s a good idea to redeem giftcards soon after receiving them, especially in these uncertain economic times.
Holiday Sales Predictions
by David Bodamer November 26th, 2008
There are a lot of different numbers floating around for what the holiday season might look like. Here’s a rundown of the various predictions as well as what the same organizations projected last year versus what they actually measured.
ICSC bases its projections on the same-store sales figures for the November/December period. ICSC is projecting same-store sales to grow 1.0 percent. Last year, the trade organization projected an increase of 2.5 percent. The actual increase it measured during the period was 2.1 percent.
Retail consulting firm America’s Research Group also bases its projections on same-store sales for November/December. In a joint report with UBS, it projected same-store sales to decline 1.0 percent. It is the first time in the 23 years of compiling the survey that America’s Research Group has a projected a decline. Last year, it projected a 1.8 percent increase vs. the actual 2.1 percent increase.
So ICSC’s projection last year was a bit high and America’s Research Group was a bit low. If that pattern holds true again, same-store sales could be flat.
Meanwhile, ShopperTrak, a firm that compiles foot traffic counts at malls, bases its projections on total retail sales for November/December. The group is projecting an increase of 0.1 percent. Last year, the group projected a 3.6 increase. The actual increase, according to the group, was 4.5 percent. The group is also projecting a 9.9 percent drop in foot traffic compared with last year.
Retail consultant TNS Retail Forward also measures retail sales for the November/December period. This year, the projection is for an increase of 1.5 percent. That would make it the weakest holiday since 1991 in the group’s estimation. Last year, the firm’s projection was a 3.3 percent increase. The actual increase, according to TNS, was 2.7 percent.
The National Retail Federation measures total retail sales for November/December. The group is projecting a 2.2 percent increase this season. Last year, the group projected a 4.0 percent increase. The actual increase, according to NRF’s tally, was 3.0 percent.
Lastly, consulting firm Deloitte looks at sales for the three-month period from November to January. This year, it is projecting growth from 2.5 to 3.0 percent. Last year, the firm projected an increase during that period of between 4.5 and 5.0 percent. The actual increase, according to Deloitte’s numbers, was 3.4 percent.
So, there it is. Every group, not surprisingly, is projecting a weaker holiday shopping season than last year. Last year, almost every group–except for America’s Research Group–ended up being too bullish in its projections. If that’s any guide, the season may be even worse than these numbers suggest.
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