E-cards have drawbacks
Nearly all gifts cards have shipping and handling costs, which vary with the delivery time frame. You can avoid those fees by purchasing an electronic gift card, but only 12 of the 31 retailers Bankrate surveyed offer e-cards.

If you want to go the e-card route, know that there's a drawback: In most instances, an e-card can be redeemed only online, not in stores. For example, Barnes & Noble, Bloomingdale's and Costco allow you to buy electronic gift cards online, but those e-cards can only be used online. The exceptions are Neiman Marcus, Nordstrom, J.C. Penney and Saks Fifth Avenue; their plastic and e-cards can be used online, in stores and even for catalog sales.

State laws vary
Many states are adding gift cards to their consumer protection laws. Rules having to do with expiration dates and maintenance fees are being amended. Several states recently passed laws that don't allow cards to expire. For example, in California, Florida, Maryland, Massachusetts and Nevada, cards cannot expire. Other states put limits on expiration; for example, cards can't expire within the first two years of issuance.

"Clearly there is a groundswell of support to get rid of expiration dates," says Horne. "It's an easy issue for politicians. Merchants think it's better to get customers into the store, spend more than the value of the cards and become loyal customers, so they did away with their fees and expiration dates."

But Horne says that those benefits don't apply to the open-loop cards. "Their revenue streams have to come from somewhere else -- like the upfront fees."

To find out how your state treats gift cards, check with your state's consumer protection department.

For the full results of the Bankrate gift card study, see"2007 Gift Card Study comparison chart" for plastic gift cards and "Electronic gift certificates limited" for electronic gift certificates.

Note: In previous years, Bankrate surveyed the top 100 retailers, which included the major grocery store chains and drugstores. This year we surveyed retailers including department store chains and shopping malls. We did not include grocery stores and drugstores.