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MasterCard Closely Tracks Holiday Spending Patterns Right Down to the Hour

What is about 2-by-3 inches in size, has a magnetic personality and provides keen insight into holiday shopping habits? Answer: The credit card.

A new study released last week by MasterCard Worldwide debunks the myth that the day after Thanksgiving is the busiest shopping day of the season,at least when it comes to credit and debit card purchases.

It suggests that the Monday after Thanksgiving, also known as Cyber Monday, is not the busiest day for online sales.

“According to our data from the last few years, we anticipate the day before Christmas Eve, which falls on a Saturday this year, will be the busiest day,” said Larry Flanagan, chief marketing officer for MasterCard Worldwide.

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Charge card records have become increasingly more important in forecasting seasonal spending as studies find debit cards growing in popularity with shoppers.

The National Retail Federation, a Washington, D.C.-based trade group, reported Nov. 13 that a poll of 8,000 consumers found that 39 percent of consumers plan to use their debit cards most often when purchasing gifts this season. That’s up from 34 percent in 2005.

An independent research company conducted the Master Card study.

In addition to reviewing historical charge card transactions data, the study polled a total of 1,638 consumers via online interviews between Oct. 4 and 10.

Seventy-four percent said they believe Thanksgiving weekend is the busiest time for holiday shopping.

But transaction records show that last year’s Black Friday was in fact, the sixth busiest shopping day of the season. And that the Sunday after Thanksgiving has ranked the least busy day of the season the last two years.

Ranking information for the Saturday after Thanksgiving was not provided, but the busiest day in terms of charge card transaction volumes last year was Dec. 23, and the busiest hour was in the afternoon on Christmas Eve.

“MasterCard is uniquely positioned at the heart of commerce, and as such we have a tremendous amount of insight into the spending patterns of consumers,” Flanagan said. “There are 31 days between Thanksgiving and Christmas, and we expect to see consumers use every bit of that time.”

According to the study, the busiest day for online sales last year was not the first, but the second Monday after Thanksgiving.


Cash Or Credit

The National Retail Federation report released earlier this month found that while 39 percent plan to do most their shopping with debit cards, 31 percent plan to use credit cards most often, 24 percent plan to use cash most often and 6 percent plan to write checks.

According to the federation, the number of people using cash dropped from 29 percent in 2005 and 26 percent in 2004. The number of people using checks dropped from last year, going from 9 percent in 2005 to this year’s 6 percent.

“With full schedules, many people find it hard to carve out time in their day to get their holiday shopping done,” said Tracy Mullin, the federation’s president and chief executive officer. “Time-strapped shoppers enjoy the convenience of debit/check cards when out shopping for holiday gifts, eliminating the need to make an extra trip to the bank or ATM to withdraw money.”


Competing For The Charge

Retailers are not the only ones vying for shoppers’ attention this holiday season. MasterCard and San Francisco-based Visa USA both launched major marketing campaigns designed to encourage shoppers nationwide to reach for their respective logos first.

MasterCard’s “A Home for the Holidays” sweepstakes promises shoppers one entry per MasterCard-branded charge made between Nov. 1 and Dec. 31. The prize is $350,000 towards the purchase of a home.

Meanwhile, Visa is touting a “$100K Holiday” giveaway that awards one entry per charge made between Nov. 1 and Dec. 31.

In addition to grand prize of being able to spend $100,000 anyway the winner so chooses, Visa is conducting a Web-based instant win contest in which consumers can play daily with no purchase necessary for various smaller prizes.

“We want to reward cardholders for using their Visa card for their holiday purchases,” said Kellie Krug, senior vice president of marketing communications for Visa.

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