MISSISSIPPI STATE -- Gift cards are gaining on clothing as the most popular gift to give at the holidays, but this seemingly fail-proof present often is not as popular with those who receive them.

Consumer Reports found in a recent survey that more than 23 million Americans have unused gift cards from last year worth a total of at least $972 million. Almost 1 in 5 of those who received a gift card in 2005 has not yet cashed it in for merchandise.

Gift cards come in many forms, and the Federal Reserve Board defines various forms online. Common types of retail cards carry the name of a particular store, brand or restaurant and can be used as cash only on that company's web site or in stores or restaurants for purchases. An example of this would be a Land's End gift card.

Other cards carry the name and logo of an issuing bank or financial institution and can be used wherever that bank or financial institution's credit, debit or charge card is accepted. An example of this type of card is an American Express gift card.

Bobbie Shaffett, family resource management specialist with the Mississippi State University Extension Service, urged buyers to beware as they purchase any type of gift card.

“You have to know the rules and play by the rules, and make sure the person you give the card to also knows the rules,” Shaffett said.

She urged consumers looking to gift cards as the solution to holiday gift-buying to ask questions and read the fine print before purchasing these cards.

Some retail cards expire after a certain time, and others have a monthly inactivity fee that begins after a certain length of time and is deducted from the card balance monthly. A few cards can be replaced if lost or stolen, but these usually require the original receipt or proof of purchase.

She urged gift-buyers to carefully select retail gift cards, ensuring that the gift recipient will like to shop in the store for which a card is being purchased.

“Stores do not have to take back merchandise, including gift cards, they have sold. It is a privilege that some stores offer because they want happy, satisfied customers, but many stores have a ‘no refunds, no exchanges, all sales are final' policy that is perfectly legal,” Shaffett said.

Bank cards that can be used wherever the issuing company is accepted may seem like the perfect alternative to retail cards that can be used only in one place, but Shaffett urged caution on these.

“Most bank cards have a processing fee that is often as high as almost $10, many have monthly or per-use maintenance fees, and some expire after a certain date,” Shaffett said. “Be sure you know the terms of the card before purchasing one as a gift.”

Susan Cosgrove, Extension family resource management area agent based in Newton County, said retail and bank cards may make holiday gift-buying easy, but shoppers still should stay within budget.

“Plan ahead for the holidays so you know how much you can spend,” Cosgrove said. “If somebody has not put money aside for the holidays this year, they probably should spend less than they did last year.”

Cosgrove encouraged shoppers to calculate how much they spent on the holidays in recent years, and divide this amount by 12.

“That amount should be in your monthly budget as holiday savings,” Cosgrove said.

While financial experts recommend consumers not go into debt paying for Christmas gifts, those who do spend more than they have on hand should be sure to have the debt paid off by February.

“Don't overextend yourself,” Cosgrove said. “Marketers and retailers are trying to make everyone think that in order to have a good holiday, you have to get certain things. But money does not buy happiness, and there are lots of ways to give gifts that do not have big price tags attached.”

Visa has a holiday budgeting calculator online at http://www.practicalmoneyskills.com that recommends consumers not spend more than 1.5 percent of their annual gross income on the holidays. A family making $100,000 could spend $1,500 on holiday gifts, travel, cards and parties. According to Visa, the average American spends $941 on the holidays.