Next time you're at the mall, count the number of people paying with gift cards. Odds are you won't see many.
Retailers should be buzzing right now with holiday gift card redemptions. But, there's early evidence retailers aren't getting much of a boost from gift cards this year, according to NBG Market Analyst Brian Sozzi.
"Retailers had to ramp up discounts after the holidays. They typically don't do that if gift card sales are very strong," Sozzi said. "This could hit chain-store sales and impact the first-quarter outlook in 2013."
"Sales of gift cards recovered, but not fully," he told CNBC.com. "...Part of the problem is that there was a little more discounting around Christmas than last year."
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Gift cards can often be the go-to gift of last-minute holiday shoppers since they can stand-in if a gift is out-of-stock, or if the shopper is stumped for a good gift idea or in a rush. But this year, a longer holiday season gave consumers more time to shop, and when they arrived at the stores, they found lots of merchandise was being sold at steep discounts.
However, there are other trends at play too. Taubman said he expects the gift card trend is growing weaker permanently as consumers adapt to an electronic world.
According to Taubman, consumers are relying a lot more on their smartphones to make purchases. So, plastic gift cards will be forced to evolve as fewer people will want to carry around the cards when they're relying on a digital wallet.
Michele Clarke, a New York City-based marketing consultant, is part of this so-called dying trend. She bought far fewer gift cards this year - after giving hundreds over the years.
Among four members of Clarke's family, they only received three gift cards this year - far fewer than in years past.
"We used to love receiving them, but they never seemed to get spent - or we didn't spend them fast enough to avoid losing some of the value to hidden fees," Clarke said. "We figured if we're having this much trouble spending them, others must be in the same situation. So, they started to feel like a waste of money."
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Retail industry trade group, the National Retail Federation, doesn't have information on how much people spent on gift cards over the holidays, but NRF spokeswoman Kathy Grannis expects to have new data on this topic later this month.
-By CNBC's Stephanie Landsman; Follow her on Twitter @StephLandsman.
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