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Mark Lennihan  /  AP
Most businesses offer fair and reasonable terms on their gift cards, but then there are the others.
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updated 11/28/2010 1:03:06 PM ET 2010-11-28T18:03:06

What to give for Christmas when you don't have time to shop? Gift cards, of course. In recent years cards have become one of the season's most popular items, perfect for busy shoppers who want to avoid putting much thought into a gift, and good for receivers who like the flexibility to get what they want.

Retailers love them too. Cards get lost, some get forgotten and sit around for months or years. And those unused gift cards represent free money for stores. Consumer Reports has estimated that a quarter of all gift cards go unredeemed for a year after purchase, and about 7 percent never get used at all. It adds up to an estimated $8 billion bounty annually for the retail industry.

Forbes.com slide show: The best and worst gift cards

Buyers of gift cards and recipients should know that not all gift cards are created equal. Like to shop both at the store and on the Web? Some retailers have effectively merged their Web operations with bricks-and-mortar, allowing customers to buy and redeem gift cards in the store and online; others can't or choose not to.

Some charge a shipping fee to send a gift card to a recipient. Some accept redemptions at all locations, others at only select locations. Expiration dates are less of a differentiator these days — while they're still commonplace at local eateries, few major retailers have them anymore. And of course, you buy a gift card from a financially shaky company at your peril: There's no guarantee that your friend or relative will have a place to cash it in a few months from now.

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Scripsmart.com, a website started a little over a year ago by Judd Lillestrand, formerly of Zappos.com, tracks gift card data from retailers all over the country. While no one wants fees or expiration dates on a card, "It's more than that," says Lillestrand. "People buying gift cards want to know: Is it refundable when it's lost or stolen, and is it redeemable in all locations?"

With holiday shopping season upon us, we took a look at ScripSmart's latest ratings to gauge the best and worst gift card deals right now. While the company scores myriad gift card terms — stores, banks, local and regional — we focused on major national retailers with a presence in at least several states.

At the top: Bass Pro Shops. The fishing and camping retailer lets customers buy and redeem gift cards online and in all stores. There are no hidden fees or expirations, and balances can be checked online.

Other gift cards that come up aces: American Eagle Outfitters also has very liberal redemption policies, including by phone. Gap (along with units Banana Republic, Piperlime and Old Navy) allows customers to reload cards as they spend, among other goodies. Disney steers clear of hidden fees and offers refunds on unused cards.

Then there's the flip side — companies that tend to limit redemption options, charge fees or fail to offer refunds for lost or stolen cards. Among the worst deals, according to ScripSmart:

Rite Aid: the drugstore chain doesn't replace lost cards, and doesn't redeem online.

Simon Malls: A mall-based gift card good at many properties around the country, the Simon Mall gift card carries a $5.95 purchase fee and a $2.95 monthly fee after a year of inactivity. It’s also not refundable, and there’s a $15 charge to replace a lost or stolen card.

American Apparel: No online redemptions or replacements for lost or stolen cards. Also, the California-based clothier is less than financially stable these days, making this gift card buy risky.

© 2012 Forbes.com

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