by George Bao

    LOS ANGELES, Dec. 23 (Xinhua) - Gift card brings people happiness since it can be used to buy gifts people wish, but some people hate it since it has many pitfalls. Love it or hate it, Americans would get fewer gift cards this Christmas than last year.

    Christmas is a time to give gifts to the family members, relatives and friends. Traditionally, people would buy gifts and send them out. However, people may not like the gifts they have received, or they already have the same gift. Therefore, they usually would go to the shop to return the gifts if they have a receipt.

    There is no tradition for Americans to give cash. So in the past few years, shops and credit card companies have established the business to sell gift cards. People do not have to send out gifts, they mail out a plastic card so people can go to the shop to buy gifts they like.

    Gift card sales have promoted businesses since it is convenient to use. Last year, 91 billion dollars of gift cards were sold. But this year sales are expected to drop to 87 billion dollars according to Tower Group, a research organization. The recession has resulted in less giving and taking.

    According to the National Retail Federation (NRF), more than 77percent of American shoppers will buy at least one gift card this holiday season. The average person will spend 139.91 dollars on gift cards this season, down from 147.33 dollars last year. The average value per card will dip slightly to 39.80 dollars this year, compared with more than 40 dollars last year.

    Americans love to see the plastic cards during the holiday season. Statistics show that more than 95 percent of Americans have given or received at least one gift card, and in 2007 more than 60 percent of people surveyed said they planned to give a card that year.

    According to NRF, department store cards are the hottest item, with more than 38 percent of shoppers planning to buy one. Restaurants are the next with 33.4 percent, bookstores with 24.4 percent, electronics stores with 18.8 percent and discount stores with 16.3 percent.

    Some Americans see gift cards as too impersonal, but one expert said they actually might be the perfect gift in the wake of the recession.

    "There aren't many items out there more practical than a gift card," said Phil Rist, an executive vice president with BIG research, the firm that conducted the National Retail Federation's annual consumer holiday survey.

    "In a holiday season where people want to make sure that recipients will be able to use what they're given, letting someone pick out their own present by giving them a gift card is about as sensible as it gets," said Rist.

    Aside from the recession, gift card has its own problems or pitfalls. Expiration date is a concern. People have to use the card before the expiration date, but many careless customers would forget it and many times the gift cards they received would become no value at all.

    Some companies charge a monthly fee when the card is not used and would drain down its value considerably over time.

    American Express had previously charged 2 dollars a month on cards that were more than a year old. Once an iCard Visa gift card turns six months old, the company imposes a 25-dollar charge every six months, although the company dropped its fees in October this year.

    A survey by Consumer Reports found that more than a fourth of the people who receive gift cards for the holidays do not use them within a year. But the value of gift cards issued by banks would be wiped out if not used at a certain time.

    In such a situation, companies that issue the cards would the winner but the customers would be the loser.

    People who have received the gift cards may forget the expiration dates or never use them.

    The Tower Group, a financial services research firm, estimates the current "lost value" of those unused cards at 5 billion dollars. For example, in 2006, retailer chain store Best Buy reported a 43-million-dollar boost from cards that were unlikely to be used.

    To protect consumers, California has already prohibited expiration dates or fees on many gift cards, but not on the bank-issued cards.

    The U.S. Federal Reserve proposed last month nationwide restrictions on the cards. They would not be allowed to expire for at least five years. Maintenance or "dormancy" charges would not be allowed unless the card is unused for 12 months, and clearer notification about any fees would be required. The regulations are expected to take effect late next year.

    Herald Columnist Mike Benbow wrote in his column that gift cards are particularly helpful with relatives in other states. They're easy to buy and send, and the recipients can get exactly what they need. Also, a single card can benefit more than one person.

    For example, he said, the husband of his favorite niece in Illinois has been getting gift cards from him for the last few years for dinners at restaurants his niece particularly likes. Of course he takes her out to dinner when he cashes in the card.

    Even supermarkets owned by Chinese Americans have started to issue gift cards. 99 Ranch supermarket in Southern California issued gift cards of 25, 50 and 100 dollars for the first time this year. Shop owners found it a good way to promote their products or services.