Last minute gifts: Gift cards

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With just eleven days until Christmas, if you're having trouble deciding on gifts, there is a popular option that is at the top of the list again this year - gift cards.

According to the National Retail Federation, eight out of ten people will buy at least one gift card this season. They come in handy when there's a special event purchase, when finances are tight, or just to buy what you want, when you want it.

But there are things to consider.

Random gift cards can drive traffic into new stores that perhaps your recipient might not otherwise visit. But researchers have found, the better choice is to give a card related to something you know your recipient enjoys. Experts say they will typically spend 20-percent more than what's on the card.

And what about fees and expiration dates? Years ago, consumers were stung by surprise fees associated with some gift cards that would actually eat away at the value of the card. Many of those issues have been addressed with tougher laws to protect consumers.

Under the CARD Act, most store gift cards won't expire before five years.

The best way to avoid fees is to purchase a store-issued card. The general purpose cards such as Visa and American Express gift cards often include fees. Always inspect your gift cards to make sure the pin number on the back isn't scratched off or tampered with.

Purdue retail expert Richard Feinberg said stores have gotten more competitive by eliminating  fees and cancellations, "So it's less of a problem now, even if the need for the law is less. But there are still some cards that do run out after two years, and you have to pay a reinstatement fee."

Experts tell us consumers actually perceive the gift card as more attractive and interesting than a gift costing the same amount of the card's value, or the same amount of cash.

Feinberg advises that you take care of your cards, and make an effort to utilize them. 

"The companies don't take your name, don't take your contact information and therefore don't contact you when you haven't used your card in five years," he said. "So the bigger problem is there's a lot of money left on the table each year."