Bargain Hunting, Returning Gifts

Shoppers headed to stores and malls Friday to hunt for post-Christmas bargains, as retailers sought to get rid of leftovers and recoup business in a season that will likely to turn out to be only modestly better than a year ago.

"If you're a toy retailer, you had a tough Christmas because Wal-Mart went out there and undercut your prices," said National Retail Federation vice president Rick Gallagher on CBS News' The Early Show. "Department stores had a tough time mainly because apparel prices have been undergoing deflation so they had to sell more just to keep up with last year."

Gallagher cautions the final numbers aren't going to be available until mid-January, but "it looks as if it was a pretty average Christmas, which means between about a 5 or 6 percent increase over the year before."

Retailers are counting even more heavily on the week after Christmas to meet their sales goals, as two consecutive snow storms in the Northeast, a lack of must-have items, a sluggish job market and a lack of bargains kept shoppers away from stores during the pre-Christmas season.

In Columbus, Ohio, shoppers started lining up outside a Target store at the Polaris shopping center just after 6:30 a.m. By the time the store opened a half-hour later, about 100 people were at the store's two entrances.

"You've got to move fast. That's why I'm wearing tennis shoes," said Christine Best, 33, of the Columbus suburb of Delaware. "They slash prices on everything Christmasy. I'm headed straight for the wrapping paper."

Best said she buys holiday gifts the day after Christmas and tucks them away for the following year.

"I only bought about $100 worth of stuff before Christmas this year because I had most everything I needed last year."

"Just mumsing around, looking for stuff," a woman shopper told Rich Johnson of CBS radio affiliate KIRO in Seattle. "We're looking to get the best buys," said a man.

Some, report Johnson, consider it part of the holiday experience.

It's just bargain-hunting, having fun," said a shopper. "Nothing like getting up at 7 in the morning and hitting a crowded mall!" added another.

Many of Friday's shoppers are returning gifts. American Online Consumer Adviser Regina Lewis, on The Early Show, says those bringing back merchandise should not be defensive.

"You should not feel at all guilty about returns," said Lewis. "Anybody in the retail business will tell you it's the cost of doing business and, in fact, they view it as an opportunity. If you are pleasantly surprised, you'll be a loyal customer and shop throughout the year.

"Also, more often than not when people return or exchange something, they almost never get out of there without getting something of equal or greater value," added Lewis.

This holiday season, high-end stores such as Neiman Marcus and Nordstrom have enjoyed robust sales, while mid-priced department stores have fared the worst. Even discounters like Wal-Mart Stores Inc. have struggled with muted sales gains, as lower-income consumers still haven't benefited from the economic recovery.

"Luxury goods had a fantastic holiday selling season," Gallagher told Early Show co-anchor Tracy Smith. "They've been in the doldrums a couple of years but apparently the upswing in the stock market has really helped."

Another bright spot this year was on the Internet.

Online sales were up about 46 percent from the previous year and don't fool yourself, that's not people like Amazon.com, that is your familiar brick and mortar retailers that are selling online," Gallagher said.

Some of those gifts purchased online may need to be returned.

"If the item was bought from the online division of a brick-and-mortar merchant, such as Macy's or Target or Barnes & Noble, you might be able to bring it back to the store in some cases without having to deal with the Web site," advises CBS News Technology Consultant Larry Magid.

If not, "in most cases, you have to pay the return shipping, unless it's defective merchandise, in which case the company might pick up the return shipping charges. Otherwise, you're pretty much stuck with them," said Magid. "They may also try to charge you a return stocking fee, especially if the item has been opened — so if you're sure you don't want it, don't even open it."

Clearly, the week after Christmas has become increasingly important. A year ago, that period accounted for 11.8 percent of holiday sales, up from 10.6 percent in 2001. This year, the nation's retailers are counting on the period to make up for an even bigger share, betting on consumers returning to the malls to redeem their gift cards and buy more merchandise.

"Twice as many people bought gift cards this year as last year," said Gallagher. "Retailers don't get to book those sales until you go out and actually spend the money on that gift card. So there is about $19 billion worth of gift cards just burning a hole in people's wallets and our research shows that about 95 percent of that will be actually spent in the 30 days after Christmas."

The best places to find bargains?

"Look at those places that might have had a tough Christmas, because they're going to have the most inventory that they want to clear out before their fiscal year ends before the end of January," said Gallagher.