Store Gift Cards

Gift cards from retailers -- fewest restrictions

There are two basic types of gift cards: store or retailer-issued cards and network-branded gift cards from the major credit-card issuers (such as Visa, MasterCard, Discover, etc.). Retailer-issued cards are often called "closed-loop" because they can only be used at the issuer's store and sometimes other stores or websites owned by the same parent company. Bank-issued cards, on the other hand, usually bear the logo of a major credit card and are called "open-loop" because they can be used at any location that accepts that credit card.

Virtually every retailer in America offers gift cards, from gas stations to chain stores and restaurants. Store cards, for the most part, have no fees or expiration dates, but they are generally limited to use in the issuing store. If the recipient does not like that store or cannot find a suitable gift there, it is likely that the card will not be redeemed. In fact, The New York Times estimates that approximately 10 percent of money spent on gift cards is never used. That translates to billions of dollars lost each year. In 2006, according to Consumer Reports, Best Buy alone reported a $43 million dollar gain from gift cards unlikely to ever be used. The Montgomery County Office of Consumer Protection explains that in total "this 'breakage' amount is more than double the $3.5 billion annually estimated to be lost from debit and credit card fraud."

Wal-Mart offers both traditional and electronic gift cards without expiration dates or fees of any kind. The card, however, can only be used at Wal-Mart stores or Walmart.com; it can also be redeemed at Sam's Club or SamsClub.com if you are a member. The Wal-Mart gift card is sold in preset denominations ranging from $10 to $2,500. Wal-Mart e-gift cards can be bought in any amount from $10 to $200. If you lose your card, you're out of luck unless you've noted the card number and pin number; in that case, you can still use the number online provided no one else has used your card number.

According to CreditCards.com, Home Depot and Best Buy are some of the biggest retailers of gift cards. Both stores offer a variety of gift card designs, none of which carry fees or expiration dates. Both stores allow customers to reload their cards with additional value, but Best Buy also offers protection against loss or theft; Home Depot does not. If your Best Buy gift card is lost or stolen, Best Buy will replace it as long as you can provide proof of purchase. Neither store sells electronic gift cards, although the Best Buy card can be used online as well as in retail stores.

iTunes is another popular issuer of gift cards. Cards can be purchased online, where they can be e-mailed, printed or mailed to recipients, or you can buy gift cards at various retailers including Walgreens, Starbucks and Apple stores. Traditional cards are available in denominations of $15, $25 or $50, while e-mailable gift certificates range from $10 to $200. Neither type of iTunes card carries any fees or expiration dates, but the card cannot be replaced if it is lost or stolen.

Though most retailer-issued gift cards are safe, experts warn that buyer diligence is still required, because some companies have questionable terms and conditions connected to their cards. Burlington Coat Factory, for example, charges $3 per month after 12 months of non-use and won't replace lost or stolen cards.

Other cards do not have fees or expiration dates, but do have limited usage. Starbucks gift cards, for instance, cannot be used at some Starbucks kiosks in airports, supermarkets and bookstores. American Airlines gift cards can't be used for upgrades or with travel agents, at airport ticket counters, or for flights originating outside of the U.S.

Store gift cards are generally limited to use with the issuing store, though most can be used at the retailer's website as well. Some stores are pushing the envelope in order to make their cards more flexible. Gap Stores, for example, has introduced the Options Card, which is a reloadable gift card that can be used at any of the Gap-owned stores (Gap, Old Navy, Banana Republic, Piperlime.com) as well as online.

Retailers are finding more ways to attract customers with their gift cards. Many stores offer a wide variety of designs for different personalities, interests and occasions. Cardways.com, for example, allows consumers to purchase personalized gift cards to places like Lowe's, Circuit City and Borders, among others, placed within the greeting card of their choice for $4.50 plus postage. Customers simply choose the store card they want to purchase, upload a photo and choose a greeting card.

Target alone has 35 different gift card designs, eight of which have special features such as animation, music or attached gifts. Target's gift cards, like most retailer-issued cards, do not have expiration dates or fees, and are available in denominations ranging from $10 to $1,000 for traditional cards and $5 to $5,000 for electronic cards. Target will also replace lost or stolen cards as long as they are presented with an original or gift receipt.

Experts say that in order to get the most for your money, be sure to match the store to the recipient. It is also important to know the prices at the particular store you are purchasing from and add an appropriate amount of funds, so that purchasing a gift is possible. These two steps reduce the risk of the money being wasted on unredeemed cards.

E-gift cards

Most retailers with an online presence offer e-gift cards in addition to plastic cards. These cards are very similar to the physical cards, except they can often be personalized and sent to a recipient's e-mail address within minutes. The only caveat is that they can usually only be used for online purchases. You'll want to make sure that your recipient knows their way around a computer and the Internet, and feels comfortable making purchases online.

Sears, Nordstrom, Abercrombie and Fitch, and Kohl's are some of the few stores that allow customers to print an e-gift card and use it in a brick-and-mortar store as well. E-gift cards at these stores can be used in stores, online and for catalog orders.

The Sears eGift Card is one of the more flexible e-gift cards. You can buy it online, and it's then e-mailed to the recipient. There is no charge to purchase the Sears eGift card. The card can be redeemed online or for phone purchases, but its value can also be redeemed in any Sears, Lands' End or Kmart store as well. Sears e-gift cards never expire, and you can check your card balance online. They can be purchased in denominations from $5 to $500.