Online Sales Surged on 'Cyber Monday,' Visa Says

LOS ANGELES – U.S. online holiday sales, which are expected to hit nearly $20 billion this year, took off on Monday.

According to Visa USA’s SpendTrak report, consumers spent approximately $505 million on the Internet Monday using Visa branded cards. The figure represents a 26 percent increase from the same day in 2004.

"Cyber Monday," the term coined for the Monday after Thanksgiving, came on the heels of a decent but not spectacular post-Thanksgiving weekend — the traditional start of the key holiday shopping season.

Since Nov. 1 through Nov. 28, ,Visa USA says, consumers have spent over $9.9 billion online using the Visa card. The average amount for their purchase is $87.85. The previous high for the 2005 holiday season was Nov. 15, with a spending total of about $461 million.

“As expected, consumers flocked to the Internet on Monday to continue their holiday shopping, said Brad Nightengale, VP of Emerging Products for Visa USA. "We believe E-commerce will continue to see gains in the coming weeks as consumers turn to the speed, convenience and security the Internet provides for their holiday purchases.”

Consumers are seen spending $19.6 billion on non-travel goods on U.S. Internet sites during November and December, up 24 percent from $15.8 billion during the same period last year, according to comScore Networks.

That accounts for less than 5 percent of total holiday sales in the United States but excludes large corporate purchases and sales on auction sites like eBay Inc. (EBAY), the most popular shopping site on the Web.

"Most people who shop online do it at work, not at home," despite rising rates of high-speed home Internet connections, said Jay McIntosh, Americas director of retail and consumer products at Ernst & Young. Work connections tend to be faster than those at home, he said.

While companies like Amazon.com (AMZN) were first to make a splash selling online, traditional retailers have helped to drive sales with investments in their own Web sites and by offering consumers the chance to return Web purchases at physical stores, McIntosh said.

Concerns about returns and the inability to touch and feel items are major issues now for consumers who in recent years had listed security as a top Web-shopping worry, he said.

While today's Web shoppers are wooed by conveniences such as avoiding store lines and driving costs, as well as price-comparison tools offered by Shopping.com, Shopzilla, Yahoo Shopping and Google's Froogle, a survey from online retailer association Shop.org said the biggest draw was free shipping offers.

Jupiter Research analyst Patti Freeman Evans said consumers will be more concerned about prices this year due to higher home heating costs and added that many shoppers believe they can find better deals online because there is more choice.

"Pricing online is competitive. Sometimes you can get better deals online, sometimes you can get them in stores with sales and coupons and rebates," she said.

Reuters contributed to this report.