The holiday season calls for gift giving. But sometimes, giving a gift card is just easier and, frankly, more appreciated by recipients whose tastes may diverge from yours, or who have no room or desire for less-than-perfect stuff. 

Gift cards offer some (but not all of) the convenience and flexibility of cash, for both the giver and the recipient. So why not just give cash? 

Famed behavioral economist Dan Ariely suggests that recipients of cash feel guilt if they spend it on something self indulgent. Spending a gift card (or at least one tied to a specific retailer, as opposed to say, an American Express card) doesn’t carry the same level of guilt. “A dollar without guilt is worth more than a regular dollar,’’ Ariely opines. (That said, there are clearly times when cold, hard cash is more appropriate and appreciated. For example, Christmas tips to service workers who may be counting on such tips to buy gifts for their own family members.)

Whatever the underlying societal and behavioral reasons, the gift card business is booming.The global gift card market has grown from $264 billion in 2014 to an estimated $1.2 trillion by the end of 2019, according to a study by Persistence Market Research. Amazon, Apple and Starbucks—a few of the most valuable U.S. retailers—are unsurprisingly some of the most prominent players in the gift card market. So no matter how you feel about gift cards, you’re bound to come across them this holiday season, either as a giver or recipient.

The Forbes Guide To Gift Cards will help you navigate the gift card landscape—and protect yourself from fraud. 

How Soon Do Gift Cards Expire?

If you’ve ever found a gift card in the back of a junk drawer, you might assume it’s long expired and toss it in the trash. But actually, gift cards have quite the life span.

Under the federal Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, gift cards must be good for at least five years from the time they are activated. In addition, that law also limits when inactivity fees can be charged. For example, such charges can be levied if there’s no activity in 12 months.

The federal law, however, is just a floor for rules. States can regulate other aspects, such as when a credit card is considered abandoned (meaning, it can be grabbed by the state) and when a card can be redeemed for cash. They can also add extra requirements. Several states, for example, require an expiration date on the back of the card for it to be valid. For more about the rules in your state, the National Conference of State Legislatures provides this handy state by state listing here.

Things to Know Before Buying an AMEX Gift Card

American Express gift cards come from a household brand name, don’t tie the recipient to one retailer and can be used for online purchases. They’re also available for purchase directly through the American Express gift card website, which adds a major convenience factor to purchasers.

However, there are a few things in the fine print to keep in mind before gifting or using one of these cards.

Pros:

  • Available to purchase with points. If you’re an American Express cardholder, you can purchase an American Express gift card with your membership points. This can be a great way to use your rewards points around the holidays if you’ve racked them up throughout the year. 

Read more: The Best American Express Cards

  • Amex gift cards can be used anywhere Amex is accepted. These gift cards are accepted at retailers that accept regular American Express credit cards—that’s not every retailer or service provider, though, so be sure to check before providing it as payment.
  • Funds don’t expire. American Express’ fine print explicitly states that funds on a gift card never expire, which extends its validity period past any state or federal regulations. There are valid thru dates on the card, however, for merchant processing purposes. If the date has passed and your card still holds a balance, you’ll have to contact American Express for a free replacement card.
  • Lost cards can be replaced. The catch here, however, is that you must have the card number and CID, which is the three or four digit number printed on either the front or back of the card. American Express’ fine print also recommends keeping the gift card’s receipt on hand to aid in replacement. Additionally, American Express says “no refunds will be provided for amounts debited from your lost or stolen card before you notify us,” so time is of the essence if you can’t find your card. 

Cons:

  • High purchasing fee. Receiving an AMEX gift card can be great because of its flexibility, but giving one can mean having to pay extra. These gift cards incur a $3.95 purchase fee per card. If you plan on buying 10 to send to family and friends for the holidays, that’s almost $40 in purchasing fees alone. You might be better off using a free money transfer service instead. (There are no fees on the card after the purchasing fee.)

Read more: 5 Best Ways To Send Money (#2 Is Totally Free)

  • Cannot be used for ATM withdrawals. You must swipe your gift card like a credit card; you cannot retrieve money from the balance by withdrawing cash at the ATM. Since not every merchant accepts American Express, this restriction can make the card useless at certain retailers or servicers.

Things to Know Before Buying a VISA Gift Card

If you’re worried about the acceptance of an American Express gift card, you might want to consider a VISA gift card instead. There is no actual VISA gift card website, but these cards can be purchased from brick-and-mortar stores like Kroger, Safeway, or from a bank branch. If you need to purchase a VISA gift card online, you can through a third-party website, Giftcards.com.

Here are a few considerations from the VISA gift card fine print:

Pros:

  • Visa e-gift cards can be purchased and sent electronically. This can be completed through the Giftcards.com app and adds an extra layer of convenience for those gifting the card.
  • Cards can have a personalized PIN. Upon registering a VISA gift card online, a cardholder can create a customized PIN number to add a layer of protection against fraudulent charges. The PIN can be changed online or by phone at any time.
  • Lost cards can be replaced. VISA will need the full 16-digit card number, your full name, transaction history and “other relevant information.” You must call to order a replacement card.
  • You are not liable for fraudulent transactions if you notify VISA within two business days of the incident. Unlike AMEX’s restrictive fraud protections on its gift cards, VISA will not hold cardholders liable for fraudulent transactions if they’re reported within two business days of occurring. 

Cons:

  • Purchase fees. VISA gift cards have purchase fees that vary by card amount. In some cases, these fees exceed the cost of an American Express gift card.
  • Cannot be used for ATM withdrawals. Even though the gift card is a VISA card, that doesn’t mean it can be redeemed at an ATM for cash. You will have to physically swipe your card or use it for an online purchase to access the funds.
  • Cards expire. Unlike AMEX gift cards, VISA gift cards have finite lifespans. Cards expire when the “valid thru” date on the front of the card has passed.

Gift Card Cash Back Deals

Cash back is a major lure of credit cards. You get money back just for swiping the card, which essentially provides a discount to your purchases.

Some gift card issuers have taken note of the popularity of cash back and have incorporated this incentive into their own terms and conditions. Here’s how a few of them work:

  • VISA Five Back Program: VISA’s Five Back program allows 5% of the cost of purchases to be added back to the gift card when used at participating merchants. There are currently 60-plus merchants, including Nike and Sephora, participating in his deal. Physical gift cards purchased after March 1, 2018 are automatically enrolled in the cash back program. 
  • Cash back rewards through third-party exchange sites. Gift Card Granny, for example, gives the option of purchasing e-gift cards with cash back options directly from its website. A $200 StubHub card, for example, is available for purchase with $5.00 cash back. Cash back on Gift Card Granny can be redeemed for a discount or free gift card on the website.

Where to Trade Gift Cards Online

Sometimes, receiving a gift card isn’t always a win. Being gifted money to use a store that’s just not your style at can be disappointing—and some people might feel guilty about regifting the card to someone else. 

Instead of being stuck with a gift card you’ll never use, there are now a number of third-party buyers who will purchase them from you for cash. The catch here, however, is that you won’t receive the full amount. Most of these third-party buyers will take a cut of the sale in order to generate revenue and be able to operate.

Popular online gift card trades include:

Gift Card Granny: Think of Gift Card Granny like travel search site Kayak, but to find the best deal on your gift card. This online service is accredited by the Better Business Bureau (BBB) and has an A- rating. 

Gift Card Granny allows individuals to buy, sell and exchange gift cards to gift card exchanges online through its platform. Users can sell their unwanted gift cards directly to sites for up to 92% cash back or they can list it online through the platform at their own price and wait for it to sell. Payment times and methods depend on what service you end up selling your card to.

CardCash: Compared to other ratings of online gift-card exchanges, CardCash has the highest Better Business Bureau (BBB) rating of a B (the company, however, is not BBB accredited.) Users can buy or sell gift cards for up to 92% cash back. Payment is sent within 1-2 days of order approval and can be deposited via a mailed check, ACH deposit or PayPal. 

If you want the funds of your gift card sale immediately, you can exchange gift cards in-person at select CoinStar Exchanges. 

CardPool and Gift Card Spread Are Two Popular Gift Card Exchanges, But Should Be Used With Caution Neither of these companies are accredited by the Better Business Bureau (BBB) and both currently have alerts listed on their BBB webpages.

Gift Card Spread was contacted by the BBB in 2016 after a flood of customer complaints in regards to the company not responding to inquiries and not giving payment to consumers who sold their cards. Though Gift Card Spread said it implemented new systems to address these issues, the BBB notes that as of February 2017 “the pattern of consumer allegations has continued.” 

After receiving a “pattern of complaints” about failure to issue payments in a timely manner, poor customer service and gift cards rejected due to zero balances, the BBB submitted a written request on September 23, 2019 to Cardpool, encouraging it to address the complaints.

Neither companies responded to inquiries about how they’re improving their customer service.

Gift Card Fraud: A Real Threat to Consumers

As with so much in modern personal finance, gift cards are common targets for fraud. 

Imperva, a cybersecurity firm based in California, says automated bots are frequently used to exploit gift card balances on retail websites. In 2017,  Imperva discovered what it called the GiftGhostBot,”  which attacked as many as 1,000 company websites worldwide, specifically looking for valid gift card numbers. 

Here’s how the bot worked: It would access gift-card balance databases and submit random numbers until it found a match for a valid gift card with a balance. Once a match was found, the bot would then use the remaining balance on the card for purchases. This method is known as card or token cracking, and is also used to hack credit and debit cards. 

Edward Roberts, director of product management and marketing at Imperva, says the fraud usually came as a surprise to consumers.  “That person who actually owned the gift card would try and redeem the balance but find out their card is empty because someone has used it,” Roberts says.

As a result, many companies removed the gift card balance check feature from their websites or added CAPTCHAs to the feature to ensure a human was checking the balance. Imperva says it can’t determine the total amount stolen through this particular gift card fraud, but notes that the GiftGhostBot was completing as many as four million balance checks per hour. 

How To Protect Yourself From Gift Card FraudMost gift cards aren’t FDIC-insured, meaning if they’re lost or compromised, there’s no way of getting the balance back. This makes them especially vulnerable to criminals looking to hack them on the internet.

Consumers, however, can protect themselves from gift card fraud. Edwards shares these three tips to keep gift cards safe from fraudulent use:

Treat gift cards like cash, not credit. 

Most credit cards have some type of fraud protection; American Express, for example, offers full fraud protection on its cards, meaning cardholders aren’t responsible for fraudulent charges. Gift cards, however, don’t usually offer these protections, which is why Edwards recommends guarding them closely and not leaving their numbers anywhere a bot or criminal could access them electronically.

Regularly check and document the card’s balance.

Keeping up with your gift card balance can be an active way to monitor it for fraud—and help your case if you do end up becoming a victim.

“Know that your balance is still there from time to time,” Edwards says. “If it ever got compromised or stolen, you would be able to give a time frame of when it happened.”

Many companies now require authentication steps while checking a balance online, which will protect your gift card numbers from being stolen. Some companies also let you call a number to access the card’s balance (the number can be found on the back of the physical gift card.)

If your gift card is compromised, report the incident.

If you do notice that your gift card has been compromised, you should first report it to the retailer. But Edwards says don’t stop there—also report the incident to the Federal Trade Commission (FTC) or similar government organization, if you live overseas. 

“Reporting it can demonstrate that the fraud has happened and make people aware of it,” Edwards says. 

Filing a consumer complaint with the FTC can be done online or on the phone by calling the FTC’s Consumer Response Center at  1-877-FTC-HELP (1-877-382-4357.) The FTC writes on its website that “filing a complaint will not guarantee that their problem will be fixed, it can help the FTC and other agencies investigate and take enforcement actions whenever it is warranted.”