For years, many shoppers’ plastic-card collections got a serious workout during the holiday season, especially over can’t-beat-‘em-sales-saturated Thanksgiving weekend. Not this year.
As The New York Times reported last week, Black Friday-Saturday-Sunday 2010 saw the lowest percentage of shoppers pay with credit since credit-reporting agency TransUnion began surveying purchasing patterns for this timeframe 27 years ago. In addition, the American Research Group found that only 17 percent of customers used credit, almost half the number that swiped away in 2009. And although card usage dipped, the dollar amount that shoppers reported spending over Thanksgiving weekend shot up 6 percent from last year.
Now, some of the reasons why shoppers likely chose cash over credit aren’t so surprising. Again citing the Times, many people are simply keeping a tighter hold on their budgets in the wake of tough economic times, while others may have had their credit options scaled back or cut off completely, thanks to past struggles to pay or strict credit-card regulations imposed last year.
But regardless of why fewer people used credit, these spending patterns could mean good news for your store—even if you don’t stock anything even remotely resembling an Xbox Kinect or Sing-a-ma-jig.
The obvious positive takeaway is that people are buying, which hopefully will continue into 2011. But also worth noting is that many major credit cards have partnerships with mass retailers—and the promise of an extra 30 percent off at a certain store when paying with a certain Visa or Discover card can lure some natural products shoppers to large chains, especially during and after the holiday season when pocketbooks are pinched. The same rings true for cards from Kohl’s, Walmart, Macy’s, Target and the like: Screamin’ deals for cardholders can pilfer business from the little guys. But when shoppers become less keen on credit, these card-provided perks matter less, and it levels the playing field a bit.
So hopefully, this cash bump signals a soon-to-come sales boost for you and other small and independents—now that wouldn’t be such a shabby holiday bonus.