Macy's wraps up its gift-wrapping service

It's a wrap.

At least that's Macy's take on its decades-old gift-wrapping service, which is now headed the way of the coat check. The Cincinnati-based retail giant will end gift-wrapping services at all but five of its 810 U.S. stores by the end of April.

The retail giant has been quietly discontinuing the service for about three years because of dwindling demand, said Jim Sluzewski, a spokesman.

"It comes down to the fact it was a service that was little used," said Sluzewski, who admits opting for gift bags himself. "While a small number of customers expressed disappointment, most customers understand because they're not using" the service.

But some industry watchers aren't as forgiving, saying the move puts the department store chain once known for its white-glove service "one step closer to becoming equivalent to discounters like Target and Wal-Mart."

"Macy's decision to cut out their gift wrap services is penny-wise but pound-foolish," says Pam Danziger, president of Unity Marketing and author of Gifting Report 2010: The Ultimate Guide to the Consumer Gift-Giving Market. "In a race to the cost-cutting bottom, the discounters will win; they have already mastered the art of providing popular gift items at affordable prices."

Danziger said department stores like Macy's need to set themselves apart from the discounters by "recapturing the customer-service experience and delivering it to their customers." She says customers will pay more for quality service that extends to walking out the door with a perfectly wrapped gift.

"The store that makes the gifting process the easiest and most enjoyable is the one that will capture that $1 out of $10 that consumers have to spend on a gift."

Danziger's group surveyed consumers and that found three-fourths of the 1,680 gift shoppers surveyed ranked customer service as very or somewhat important to their decision about where to shop for a gift.

It's unclear how much savings Macy's will see from discontinuing gift-wrapping, Sluzewski said. And for some Macy's workers who provided gift-wrapping services, it could mean layoffs if they don't neatly fit into other departments.

Macy's in New YorkSan Francisco, Chicago, Orange County, Calif., and Miami will continue to offer gift-wrapping services because of strong customer demand.