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Navigating the holiday shopping season

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Don’t let online convenience replace due diligence when checking gifts off your list. Make sure you know the store’s return policy and ‘Grinch-proof’ your personal and financial information before hitting ‘pay now. – Francine Giani, executive director of the Utah Department of Commerce

SALT LAKE CITY — With improvement in the state and national economy this year’s holiday shopping season is expected to be stronger than last year's, analysts predict.

The National Retail Federation is forecasting 2014 holiday retail sales to hit near $620 billion, a 4.1 percent hike over totals from last year thanks to growing consumer confidence and a thriving U.S. economy. Last year’s holiday retail sales came in at $579.3 billion.

“The average consumer will spend $718 on gifts this holiday season,” said Zions Bank economic adviser Randy Shumway.

Economically speaking, increased spending helps to boost production demand for goods and thereby "the more jobs that are created,” Shumway said.

“If a person has a job, they feel more confident about the economy and they are more likely to spend money,” he said. “It’s a very positive upward cycle.”

In Utah, consumer attitudes about the current state of the economy leading into the holiday season is very high, Shumway said.

Last month, the Zions Bank Consumer Attitude index registered its highest level since its inception at 109.7. For consumer confidence, an index above 110 conveys that the economy is “running on all cylinders,” he said.

If the holiday shopping season is as robust as anticipated, there is a strong likelihood of the index surpassing the 110 mark, Shumway said. Nationally, the outlook is equally optimistic.

“We expect this year’s holiday retail sales to increase 4.2 percent year over year, compared with 3.1 percent gains in both 2012 and 2013,” explained Chris Christopher, director of Consumer Economics at IHS Global Insight. “Lower gasoline prices, elevated levels of consumer confidence and heavy price discounting are major positives for holiday retail sales this year.”

Currently, e-commerce retail sales account for 6.6 percent of all retail trade and is expected to exceed the 7 percent mark during the first half of 2015, Christopher said. The performance of cyber sales is stellar compared with the poor showing of brick-and-mortar sales in the third quarter, he noted.

Many chain stores are looking to cyberspace to gain market share and supplement weak in-store sales, Christopher added. The rise of online retail sales is placing tremendous demand on residential parcel delivery services, especially during the holiday retail sales months of November and December, IHS Global Insight reported.

Online holiday retail sales growth is likely to outpace last year’s growth, rising from 8 percent in 2013 to 9.4 percent this year. As a share of holiday spending, online holiday retail sales will reach a new high of 14.1 percent of total holiday retail sales, Christopher said.

About $1 of every $7 in holiday retail sales this year is likely to be sourced from online shopping, he said.

To that end, the state Department of Commerce and the Utah Division of Consumer Protection released its annual list of shopping tips heading into the heavily anticipated Black Friday and Cyber Monday retail events. The information is aimed at protecting consumers when making holiday purchases.

Analysts expect 2014 to be the “Year of the Omni Channel Consumer,” where shoppers will make purchases in the store, on mobile devices and via computer through text, email and online offers.

While some Utahns head to the mall to shop, “couch consumers” are becoming more common, making their holiday purchases using smartphones, tablets and computers, stated Francine Giani, executive director of the Utah Department of Commerce.

“Don’t let online convenience replace due diligence when checking gifts off your list,” Giani said. “Make sure you know the store’s return policy and 'Grinch-proof' your personal and financial information before hitting 'pay now.'"

Thanksgiving Day continues to grow in retail sales according to the National Retail Federation. In 2013, 45 million holiday shoppers turned up at stores and online after Thanksgiving dishes were cleared off the table.

Last year, Black Friday saw 92 million shoppers in stores and online, making it the largest shopping day of the year. The following Cyber Monday tracked 131 million shoppers clicking sales online.

As shoppers become more adept at targeting deals online, state regulators advise consumers to make sure tools are up to date before they enter financial data on any device.

“If you plan to have your phone or tablet in hand, take the time to download shopping apps from trusted sources that have high consumer ratings,” said Daniel O’Bannon, director of the Utah Division of Consumer Protection. “Also make sure you have anti-virus software on those handheld devices to help avoid any risks for identity theft.”

The National Retail Federation reported that 42 percent of consumers say they plan to use their smartphone and 53 percent prefer tablets to get cyber deals during the 2014 holiday season.

Shop.org projected that 2014 online holiday sales will grow between 8 percent and 11 percent this year, totaling around $105 billion spent in cyberspace.

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Tips for a safe holiday shopping season

1. Use smartphone and tablet devices wisely to avoid fraud. The rule of thumb is be sure what you are installing comes from a legitimate source; keep an eye on your bill; and make sure you log off retailers’ websites so your information isn’t vulnerable to cyber thieves.

2. Don’t send cash or wire money for payment. Pay by credit or charge card to protect your purchases.

3. Compare prices. Scammers will try to entice victims to their websites with ridiculously low prices.

4. Research the seller. Confirm the online seller’s physical address and phone number in case you have any problems or questions.

5. Avoid scam apps. For safe online shopping, make sure your apps are downloaded from a trusted source.

6. Keep your anti-virus software up to date on your mobile devices and home computer.

7. Enter financial information only on secure sites.

8. Keep a paper trail in a file folder. Print and save records of all your online transactions, including the product description, price, online receipt and emails in case you need to return a gift after the holidays.

9. Before you purchase, review the refund policy and delivery rates.

10. Read retailer and product reviews. Reviews from other people, experts and columnists can give you an idea of how a product performs.

Source: Utah Division of Consumer Protection

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