GETTING CARDED WEARY SHOPPERS HAVE SNAZZY OPTIONS FOR RECIPIENTS WHO CHRONICALLY RETURN GIFTS.

Byline: Barbara Correa Staff Writer

Patrick Porter typically buys Best Buy gift cards for his buddies at the holidays. He's bought cards from toy stores for his nephews.

Porter, a 27-year-old computer tech from Burbank, would even consider presenting one to a girlfriend - provided the redemption amount was significant enough. ``If it was for $500 to Victoria's Secret, maybe,'' said Porter.

Retailers have been heavily promoting gift cards as a convenient giving alternative for several holiday seasons now. But 2003 might prove to be a breakthrough year for the diminutive presents, which seem to have lost their stigma as the lazy man's gift.

``These are products with designs on the shelves as you're checking out,'' said Scott Krugman, spokesman for the National Retail Federation, which is projecting spending on gift cards for the first time this year. ``The days of gift cards being a thoughtless gift are gone.''

According to a federation survey, shoppers plan to spend more than $17 billion over the holidays on gift cards, which would account for 8 percent of seasonal sales. Research firm Bain & Co., which tracks gift-card sales on an annual basis, expects purchases to top $42 billion this year, from around $37 billion in 2002.

Retail analysts point to the convenience factor of buying gift cards as the key to growing popularity. But they say the appeal to shoppers goes deeper than that.

``The bottom line is it's more socially acceptable ... than in the past. Maybe it's a little more acceptable in the electronic age,'' said Aubie Goldenberg, a retail analyst at Ernst & Young in Los Angeles.

For bargain hunters, another draw to gift cards is that recipients can get even more for their value during the after-Christmas sales, which is when most people redeem them, said C. Britt Beemer, chairman of America's Research Group, a consumer research company. In addition, some retailers have tightened their return policies, making the flexibility of a gift card more attractive.

``The number of people today who have any negative feeling about them is 6 percent,'' said Beemer. ``It was 39 percent 10 years ago.''

To eliminate the shame of giving a piece of plastic as a present, some retailers have gone to great lengths to transform the cards from a gift certificate - basically an impersonal receipt - into a tangible product, something attractive that the consumer can see on the shelf or in the checkout line.

Limited Too, a clothing store for tween-age girls, is offering a gift-card holder that's also a miniature recording device, so the recipient can play a personal message along with their gift card.

Whole Foods has stocked racks of gift cards at its checkout counters that come in a cute mini supermarket shopping bag.

And Safeway Inc. is hawking gift cards at its Vons and Pavilions stores along with hand-size Santa Claus, snowman and gift box plush toys that encase the cards in a little envelope customized just for that purpose.

Shoppers can choose from several dozen different gift cards from retailers as varied as Merry Maids cleaning service, Kragen Auto Parts, Nordstrom and the Olive Garden restaurant chain. Buyers of Safeway's own My Choice gift card can redeem it for credit at any of the participating partner retailers, said Sandra Calderon, a spokeswoman for Safeway.

She said Safeway started the program two years ago and has been slowly adding retailers since then. The supermarket strikes will make this a tough year to gauge sales of the cards, she said. But there's no doubt they are catching on. Safeway plans to add Home Depot, Toys ``R'' Us and Sharper Image cards to the mix in coming months.

Retailers who've resisted launching gift cards are feeling pressured this year to offer them.

``Everybody's doing it, so customers are expecting it,'' said Howard Kaminsky, senior vice president and chief financial officer of Sport Chalet, which started selling gift cards in October. He's offering them mainly for customer convenience, but he said personally, he'd rather sell merchandise than a gift card.

Still, for retailers, it's easy money locked in to their stores. Because the cards have no value anywhere else, it draws customers in twice: one round to buy the cards and second round to redeem them. And those in the second wave are likely to spend money beyond what was included in the gift card.

Retailers also get the benefit of instant cash flow from gift-card purchases, and if the cards are never redeemed, that's even better for them, said Goldenberg. For the retailers' bottom line, there's really no downside to gift cards, which is why shoppers will continue to see them popping up even in the most unlikely of places - like banks, spas and cleaning services.

Still, despite the increasingly ubiquitous gift cards, some consumers are not won over.

Mike O'Connor, a Woodland Hills shopper who usually buys jewelry or perfume for his wife for Christmas, said presenting her a gift card might land him in the doghouse. ``I wouldn't hear the end of it,'' he said.

``It's a cheapie way out,'' said Hal Kassarjian, a marketing professor at California State University, Northridge. ``These kind of gift certificates have been around a long, long time and they haven't taken over the world. I don't think (the gift card) has a long-run future because it's impersonal. It doesn't carry that same kind of jazziness.''

But other longtime shoppers have embraced cards.

Pat Bulseco, who's been doing all her Christmas shopping in a single day since 1976, said she almost exclusively buys gift cards for her two daughters, 24 and 26. ``No matter what you buy them, they always take it back,'' she said. ``This year I'm thinking about Staples - you know how your ink cartridge goes out and it's 40 bucks or something?''

Bulseco, of Long Beach, also likes to get restaurant gift cards for her brother, ``to get him out.''

But she still hits the Cerritos Mall every year just a few weeks before Christmas armed with lists of real, physical gifts to buy.

``You have to open something,'' she said. ``As a youngster I always got my new underwear and you look forward to that.''

Barbara Correa, [phone]

barbara.correa(at)dailynews.com

CAPTION(S):

photo, chart

Photo:

(color) no caption (holiday gift)

John Lazar/Staff Photographer

Chart:

IT'S IN THE CARDS

SOURCE: Bain & Company Inc.

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