Gift cards are big business; about half of all shoppers in the U.S. plan to give one, according to a Consumer Reports poll. And the amount we spend on those quick and easy gifts has risen steadily since 2009, to almost $32 billion in 2014, the National Retail Federation estimates.

It’s easy to understand why the cards are so popular. For recipients, they’re “found” money. For harried shoppers, they solve the problem of what to buy for the impossible to buy for, whether it’s a finicky teenager, a co-worker, or a friend with a particular passion.

Consumer Reports' 2015 Holiday Guide for our picks of the best gifts, details on the latest deals, time-saving tips, and much more. And see our countdown calendar for top gift ideas for everyone on your list.

The Best Gift Cards to Buy

There are two basic types. Merchant-specific gift cards bear the name of a retailer or restaurant and are redeemable only at that spot. Bank cards carry the logo of a payment card network like American Express, MasterCard, or Visa*. They can be spent wherever that payment method is accepted. Bank cards usually have a purchase fee of $4 to $6.

Consumer Reports used to warn people about bank cards because they often came with short expiration dates, service charges, and inactivity fees. In fact, our opposition to them became the cornerstone of a highly publicized campaign for more consumer-friendly regulations. Since federal rules took effect in 2010 addressing the worst problems, we no longer advise consumers not to use them.

Today, cards can’t expire for at least five years from the purchase date or from the last date any additional money was loaded onto it. If the expiration date is earlier than either of those dates, the money can be transferred to a replacement card at no cost. Issuers are required to disclose expiration dates and any fees on the card or packaging; inactivity fees kick in only after a year.

Avoid These Traps

With the new rules, gift cards are a better buy than they used to be. But you can still fall prey to scams and other pitfalls.

  • Fake or stolen gift cards. Avoid online auction sites that offer cards because they may be counterfeit or stolen, the Federal Trade Commission warns.
  • Discounted gift cards. Inspect cards before you buy them to make sure that the codes on the back haven’t been scratched off, which could indicate that the card has been drained of its value.
  • Hefty fees. Our holiday polls a few years ago revealed that as many as 15 percent of gift givers had at least one unused gift card almost a year after receiving it. The main reasons were that shoppers said they didn’t have time to use them, they couldn’t find anything they wanted to buy, or they simply forgot they had them.
  • Shaky retailers. A card from a company that files for bankruptcy or goes out of business could wind up being worthless. So be wary of companies making negative financial news.

It’s a good idea to give recipients the receipt for the card, too, so they can verify its purchase in case it’s lost or stolen. Also write down the card’s ID number, and register the card if possible. (Both will probably be required to get a replacement.) If you have a problem with a card, contact the issuer. If you can’t resolve a dispute, consider filing a complaint. For merchant cards, contact the FTC by phone (877-382-4357) or online (, or your state’s attorney general (find yours at For bank cards, contact the Comptroller of the Currency Customer Assistance Group, at 800-613-6743.

Editor's Note: This article also appeared in the December 2015 issue of Consumer Reports magazine

*An earlier version of this article indicated that you could get a Discover gift card. Discover no longer sells gift cards. All cards issued before April 30, 2015, when sales ended, can continue to be used for purchases anywhere Discover is accepted. Note that Discover gift cards do not expire, nor do the funds. The "valid thru" date on the front of the gift card allows it to be used for online or mail/telephone order merchants. If you want to use your card online after the valid thru date, call 866-522-7026 for a free replacement card.