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Gift cards: gifts that (sometimes) keep on taking

Hand reaching in pocket for a gift card

Gift cards are not only a convenient present for the hard-to-buy-for people on your holiday list, but they're also a hot gift. A new survey by Consumer Reports found that nearly half of shoppers plan to buy gift cards this holiday season. And the National Retail Federation recently reported that holiday shoppers will spend an average of $156.86 on gift cards this year, the highest amount in the NRF survey’s 10-year history.

But there are a few caveats. Unlike a cash gift, some gift cards come with fees and an expiration date—details of which might be buried in the fine print. And the value of a card could drop or disappear over time. (None of that can be welcome news for the 15 percent of consumers in our survey who said they still had at least one unused card of their own from 2011.)

Over the years, Consumers Union has pushed for limits on gift-card fees and expirations. In 2009, we urged Congress to add gift cards to a bill aimed at credit-card rip-offs. Under the law that Congress ultimately passed, a typical gift card won't expire for at least five years, and you can't be charged a fee if you have used the card within a 12-month period.

Still, those protections don’t apply to loyalty and reward cards and the promotional gift cards you redeem with credit-card points. Plus, if you get a gift card from a retailer that later declares bankruptcy, the chances of redeeming the card fall somewhere between slim and none.

A new bill in Congress aims to eliminate unfriendly terms and conditions. The Gift Card Consumer Protection Act, introduced by Sen. Richard Blumenthal (D-Conn.), would completely ban gift cards with expiration dates and nonuse fees. The legislation would also prevent companies that file for bankruptcy from selling gift cards and require them to accept and honor unredeemed gift cards. Finally, the bill treats loyalty, reward, and promotional cards the same as other gift cards, so they won’t expire.

This bill makes certain that you receive the full value of your gift card and can use it whenever you want without worrying that the card has expired or is no longer accepted. We think that would be the ultimate gift for those who give and those who receive.

Sign our petition to encourage your senator to cosponsor the Gift Card Consumer Protection Act.

[More from Consumer Reports: Top electronic products]

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