Get the most from your gift cards

Gift card on hundred dollar bills

It's a pretty safe bet you are the proud owner of at least one gift card.

The National Retail Federation says 80% of us planned to hand out gift cards this holiday season to our family, friends or co-workers. And spending on gift cards was expected to be the most since 2007 at about $155 for the average shopper.

So, yes, there's a gift card (or two or three) lurking in just about every house.

And they are just waiting to expire or be forgotten or lost: Between 10% and 19% of all gift cards are never redeemed, according to a recent report from consulting firm Grant Thornton.

Businesses love this because it can mean free money to them. The report called the unredeemed value "the greatest benefit" retailers get from selling gift cards.

When gift cards are used, they remain a business' best friend because they tempt us into making budget-busting purchases far beyond the value of the card.

That's why everyone needs a savvy plan to make the most of their gift cards, even if that means selling or regifting them. These smart moves are a good place to start.

Smart move 1. Keep track of your cards.

The biggest reason gift cards never get used is that they're gone, forgotten, hard to find or stuffed in a half-dozen drawers around the house.

Our advice: Keep gift cards in one place.

Try corralling all of your household's gift cards into an envelope that you stash with your unpaid bills. If you've received digital gift cards, create an email folder for them.

Identify which cards belong to different members of your family by hanging onto the holder they came in, marking them with masking tape labels or keeping them in separate envelopes.

Some online retailers will let you redeem your gift card before you make a purchase. If, for example, you have an iTunes gift card, you can credit the amount to your iTunes account and shop later, when you know what you want.

Smart move 2. Take them with you.

When you head out for a day of shopping, grab the envelope.

The Consumer Reports National Research Center found that a quarter of consumers who received gift cards during the 2010 holiday season had at least one gift card they hadn't spent as the 2011 holiday season approached.

We've spoken to brides with five or more unredeemed gift cards a year after their weddings.

Why the delay?

American Express found people were waiting for a shopping trip (32%), the perfect item to buy (28%) or a sale (18%).

In our experience, the longer a gift card sits around, the greater the chance it won't get used or will get lost.

The Consumer Federation of America recommends spending a gift card within six months. This will make you more likely to use all the card's value and will reduce the chances of losing out because a store closes.

Smart move 3. Watch out for expiration dates and fees.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 made these charges less of a concern.

Gift cards purchased after Aug. 22, 2010, cannot expire and result in the forfeiture of any money for at least five years.

One tricky thing to watch out for: Your physical gift card can still expire. But if that happens, and you still have a balance, the company has to transfer it to a replacement card for free.

The law also eliminates the collection of dormancy, inactivity fees and service fees unless the card hasn't been used for 12 months and the fees are clearly disclosed.

You can be charged a fee to replace a lost or stolen card.

Smart move 4. Be a smart gift card shopper.

We think the most satisfying way to spend a gift card is to treat yourself to something you wouldn't typically buy for yourself.

A 2009 survey of Canadians by gift card technologies provider Givex Corp. found that half of shoppers redeeming gift cards spend more than the value of the card.

Your treat will be far less enjoyable if you buy something that costs far more than the value of your gift card, especially if the extra cost adds to the balance on your next credit card bill.

Avoid that by setting a firm -- and modest -- limit on how much additional money you'll spend before you go shopping. For most gift cards, it shouldn't be more than $5 or $10.

Smart move 5. Don't use them and lose them.

Keep track of any card with a balance, no matter how small.

If you bought a sweater and the total came to $46.56, would you hand over a $50 bill and tell the cashier to keep the change?

We didn't think so.

A handful of states now have laws requiring stores to redeem a gift card for cash if its balance is less than a certain amount. In California, that amount is $10; in Washington, Colorado, Maine, Massachusetts and Montana, $5; in Rhode Island and Vermont, $1.

If you live elsewhere, you need a good system to save your cards so you can put the remainder to good use the next time you go to that store.

Even if the card is zeroed-out, ask the cashier if you'll need it to make an exchange or return. Some stores will only put money back on the original gift card.

Smart move 6. Regift or sell cards you don't want.

Do you have a gift card you're not all that excited about because you don't shop at that store or know you'll have to spend too much of your own cash to get anything good?

Buy yourself out and regift it.

You heard us. If it's for $20, give yourself $20 cash to spend where you please and then give the gift card to someone you know who might actually enjoy it.

Don't feel bad about this. You return gifts all the time because they don't fit, aren't the right color or fail to match your style or tastes.

If that's not an option, donate it to charity or sell or swap the card at or You won't get face value, but you'll still get some enjoyment from your present.

Isn't that the point?

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