TULSA, Okla. — The traditional post-holiday shopping crash is losing its punch, and your gift cards might be part of the reason why.
New data from LendingTree shows retail spending typically drops an average of 22.4% from December to January — that's about $83.2 billion nationally. But five of the six smallest declines on record have happened in the 2020s, suggesting our shopping habits are changing.
"What we've found is that retail business drops off a lot from December to January as people keep their credit cards in their wallets after the big holiday spending season, but we've also seen that drop off isn't quite as pronounced as it used to be," said Matt Schulz, LendingTree chief consumer finance analyst.
Department stores often see the steepest post-holiday slump, with spending falling an average of 58% from December to January. Clothing stores follow at 55%, then sporting goods and book stores at 46%, and general merchandise stores at 40%.
The slowdown hits hardest in the South, where retail makes up an outsized share of businesses and jobs.
Online shopping changes the game
Part of the shift comes from how easy it's become to shop online.
"I think part of why the decline isn't as pronounced as it used to be is simply that it's so much easier to buy whatever, whenever from wherever than it's ever been before," Schulz said.
Online shopping doesn't require getting out in the cold — or even getting out of your pajamas — and those purchases get delivered right to your door. Even e-commerce spending falls 20.3% between December and January, but online shopping's share of fourth-quarter retail spending has climbed to 17.8% from 1.2% in 2000.
Gift cards fuel January spending
Those gift cards stuffed in holiday stockings also drive January sales.
"How many times do you go into a retailer with a $25 gift card and you end up spending $40 that you wouldn't have spent otherwise?" Schulz said.
As gift cards become more popular holiday gifts, more people rush out to use them in January and February. While that money was already paid to retailers during the holidays, shoppers often spend beyond their gift card value giving a boost to retailers bottom lines in January.
Use gift cards quickly
It recommend you use gift cards sooner rather than later for two key reasons.
First, you want to make sure crooks don't drain the money from them before you use it. Second, you don't want to toss it in a drawer and forget about it.
"It's free money, and who couldn't use more of that these days?" Schulz said.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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