Many Give Cards Instead of Gifts : Christmas: As the economy forces consumers to scale back on presents, more are sending high-priced greeting cards.

When David Scully phoned his brother in Oregon and suggested that they exchange Christmas cards instead of gifts this year, he braced himself for a bit of mild taunting.

“I thought that he might be offended,” the 52-year-old Glendale resident said. “But he wasn’t. My brother was more than happy to go along with it.”

Now, Scully’s idea has caught the interest of his entire extended family, who this holiday season are swapping “upscale holiday cards” that cost between $3 and $5. Inside the cards they are writing brief personalized notes so that they can wish each other a happy holiday without emptying their wallets.

As the economy continues to spiral downward and a quick recovery appears dubious, more consumers are re-examining their gift-giving habits and letting Hallmark or American Greetings substitute for gifts to distant relatives and friends, according to retailers and industry experts.

It is too soon to make an accurate prediction of this holiday season’s sales because most people buy greeting cards only a week before Christmas, but “the substitution effect is very real,” said Gray Glass, senior vice president at Richmond, Va.-based Wheat, First Securities.

“My impression is that people substitute a greeting card for a gift almost exclusively during Christmas,” Glass said. “It doesn’t happen much between family members, but more between friends. When times get tough, people might eliminate the gift and instead give a card.”

The annual number of cards sold in the United States in 1991 is expected to reach a solid 2.3 billion, up from 2.2 billion cards sold in 1990, according to the Greeting Card Assn. In 1991, card makers will sell $5 billion in cards after a decade of steady gains since 1980, when sales were at $2.1 billion.

Sales of greeting cards have fared as well if not better during downturns in the economy, analysts said. Of yearly greeting card sales, nearly two thirds are purchased for the Christmas season, said Nancy Riviere, a spokeswoman for the Washington-based association.

“Greeting cards seem to be recession resistant,” she said. “In good economic times, people tend to buy a card to compliment a gift, and, in leaner times, people tend to send a card in place of a gift.”

While greeting cards are selling for as low as $6 for a box of 25, many stores say that their higher-priced cards made with heavy stock paper and elaborate prints and foils are selling well this year. This season’s best-sellers are made of recycled paper that--at about $23 for a box of eight--are more expensive than traditional greeting cards.

To scoop up new card buyers and extend their market, leading card makers have varied their card designs and now are offering more specialized cards for certain events and higher priced ones with art work that can be framed. A gift giver, especially when money is tight, feels less “like a sop” when giving a seasonal card that could be displayed on the wall, Glass said.

Said Scully, who is sending such elaborate missives: “It seems a little bit less personal, but I really feel I sent more this Christmas because I sat down and wrote a short note to put inside. It’s gotten to the point where we have nine nieces and nephews, grandchildren, brothers and sisters. So rather than give the kids another present from Uncle Dave, I’ll give them each a card.”

At many card shops across the Southland, sales have picked up this holiday season. Retailers say that customers are increasingly wary that their savings may not stretch as far as they had in past years and that they plan to send greeting cards to friends and family members.

Doug Westen, manager of the Card Factory in Beverly Center, said he has been selling more Christmas cards than a year ago. He estimated that about 70% of the store’s sales are generated from greeting card sales and that the Christmas season is the lifeblood of the store’s business.

“I’ve been selling a lot of cards,” Westen said. “A lot of people have commented that if they can’t afford to get a gift for their friends and relatives that they will at least get a card for them,” he said. “People feel obligated to buy a card, if nothing else.”

As a spokeswoman for Kansas City, Mo.-based Hallmark said, today’s economic climate, plagued by budget cutbacks and layoffs, has cast a dark shadow on this year’s holiday cheer. But that is even more incentive to boost the spirits of a friend who has fallen on hard times.

“If a friend was to lose a job, you might not know what to say,” said Renee Hershey of Hallmark, the nation’s leading card manufacturer. “Cards are a way to support people in good times and in bad times.”