2006 Gift Card Study
By Ellen Cannon • Bankrate.com

If you want a gift card you can use anywhere, you'll pay for the privilege, while gift cards from individual retailers are less costly and sprouting more options.

Those are the major findings of the third annual Bankrate.com Gift Card Study.

Retail store gift cards continue to be a consumer-friendly credit product, with fees and expiration dates the exception rather than the rule. The retailers can make a profit from the merchandise users buy.

Gift cards from the major credit card issuers, though, still carry an assortment of fees. All continue to charge monthly "maintenance" or "dormancy" fees, ranging from $2 per month to $3, if the gift card isn't used within a certain period of time. All but American Express have expiration dates.

Bankrate surveyed the top 25 retailers, as identified by the National Retail Federation, about the costs, terms and conditions of the gift cards they offer, both plastic and electronic. We also surveyed the four largest credit card companies: American Express, Discover Card, MasterCard and Visa.

Among the other findings in the study: • The maximum amount allowed on cards has increased in a number of cases, with Best Buy topping the list: Gift cards purchased in stores have a limit of $9,999. J.C. Penney has raised its maximum to $500 from $250. • State laws prohibiting expiration dates have had some effect. Thirteen states have banned them, and although the laws apply only to local retailers, not national ones, some national issuers have voluntarily done away or loosened their card expiration policies. • More retailers are allowing gift cards to be used online. Both Lowe's and Sears allow all gift cards to purchase merchandise online. • A number of retailers, such as Food Lion, Hannaford and Kash n' Karry, now offer reloadable gift cards. • Personalized cards are a new trend. Wal-Mart allows customers to upload photographs to create their own cards, and American Express offers personalized gift cards on which the recipient's name can be embossed. • AmEx gift cards can also be purchased in stores this year, whereas last year they were available only online. Target and Bloomingdale's have added e-cards, which can be used online but not in stores. • Some merchants have introduced new fees. Discover Card and Safeway used to offer free shipping; now Discover charges $3.95 to $6.95, depending on packaging, and Safeway charges $2.50 for delivery. • Of the electronic cards surveyed, only J.C. Penney allows the cards to be used to purchase merchandise in stores. The others -- Wal-Mart, Costco, Target, Macy's, Bloomingdale's and Kohl's -- allow electronic gift cards to be used only online or for catalog purchases.