Gift cards are one of the most popular items to give and receive for the holidays. Last year, gift givers spent an average of $172.74 on gift cards, or $47.87 per card, according to the National Retail Federation. Altogether Americans spent a record $31.74 billion on gift cards. Gift cards have consistently been the most-requested gift for eight years too, with six in 10 consumers saying they'd like to receive a gift card for the holidays this year.
While gift cards do a lot to make holiday shopping easier, not all of these products are created equal. Some retailers offer better terms on their gift cards and make them easier to purchase, while others fall short.
GOBankingRates surveyed gift cards from 30 major retailers to find those that are easiest and cheapest to buy — and which are more of a hassle than they're worth. Click through to see the 10 best gift cards you can buy and gift with confidence, and the five worst that are best avoided.
10 Best Gift Cards
The best gift cards make it easy, cheap and fast to get them to the intended recipient. Most of the best gift cards on our list offer easy systems to buy and send gift cards online, as well as check and reload balances.
Some of the better gift cards come with bonuses like the chance to earn rewards or donations for local charities. Other retailers have gift cards that can be redeemed at other stores, often sister chains owned by the same corporation.
No matter who you're buying gifts for, these top 10 gift cards make it easy for you to get presents for everyone on your list. Click through to see which retailers made this year's list.
1. Nordstrom Gift Card
Nordstrom gift cards offer convenience and choice to customers, making them one of the best picks for holiday shoppers. These gift cards are redeemable at Nordstrom locations, as well as Nordstrom Rack and HauteLook, online or in store.
Nordstrom offers eGift Cards which can be purchased online and sent digitally to the recipient, with the option to set the delivery for a specific date. eGift Cards can be bought for $5 up to $2,000, while physical gift card balances are limited from $25 to $1,000. Shoppers can buy gift cards in store or online.
Physical gift cards are shipped free of charge in three to six days. Cardholders can easily check the card's balance online and in store, too.
A policy that sets Nordstrom apart, however, is that it donates 1 percent of gift card sales to nonprofit organizations in the communities it serves. Nordstrom is also one of the few retailers to offer shoppers a way to turn gift cards into cash, even if in a roundabout way. Purchases made with a combination of gift cards and a credit card will be fully refunded to the credit card if returned.
2. Amazon Gift Card
Of all the cards we surveyed, Amazon offers one of the widest range of balance limits. Shoppers can get an Amazon gift card with as little as $.50 for a digital gift card ($10 for a physical gift card) and as much as $2,000. Amazon also makes it easy to check your gift card balance and reload the card.
Like Nordstrom, Amazon offers givers the choice of purchasing a digital gift and sending it instantly, or printing the gift card at home. Shoppers can also purchase a physical card and have it sent via free one-day shipping with a complimentary greeting card and personalized message.
Amazon gift cards can be redeemed on Amazon.com as well as related properties like Smile.Amazon.com, www.MyHabit.com, Fresh.Amazon.com, and Whispercast.Amazon.com.
3. Walmart Gift Card
Walmart is another great choice if you want to easily and conveniently get gift cards for people on your shopping list. Givers can send a Walmart gift card digitally or by mail with free shipping. These gift cards can be loaded with as little as $5 or up to $1,000, and checking a card balance can easily be done online or at in-store checkout.
Walmart gift cards can also be reloaded. The gift cards can be redeemed in Walmart stores, at Walmart.com and at Sam's Club locations.
4. Starbucks Gift Card
Starbucks gift cards are closely tied to the My Starbucks Rewards loyalty program, and having a gift card makes it easy to join. "Simply registering a Starbucks Card or eGift puts you on the path to earning food and drink rewards all year long," reports Starbucks' site. The opportunity to earn rewards is the biggest feature that put Starbucks at No. 4 among the best gift cards.
Buying and giving Starbucks gift cards is also simple, with the option to send an eGift Card via email or by mail for free. Starbucks gift cards can be loaded with up to $100, with minimum balances at $15 for physical cards and $5 for eGift Cards. These cards can also be reloaded so you can continue earning rewards.
5. Lowe's Gift Card
Lowe's gift cards can be purchased with balances between $5 and $500. They can also be sent digitally or shipped for free. Lowe's makes it easy for you to check the balance of a gift card, and shoppers can reload cards in store.
6. Macy's Gift Card
Macy's allows you to gift between $10 and $1,000. You can send an e-gift card or ship one for free, and the recipient can use it to shop online or at any Macy's store. Balances can be checked at any time online or at checkout, and Macy's gift cards can also be reloaded by visiting the department store in-person.
7. JCPenney Gift Card
Another department store, JCPenney offers many of the same perks as Macy's but with a lower balance limit of $500 and a minimum balance of $10. Likewise, JCPenney gift cards are reloadable if you visit the store, and balances can be checked online and in store. You can buy a gift card and have it sent by email or have it shipped to you or the recipient free of charge.
8. Target Gift Card
Unlike other retailers offering the best gift cards, Target does not offer automatic free shipping. Typically, shoppers have to make $25 in qualifying purchases to get free shipping. Thanks to Target's holiday shipping policy that grants free shipping on every order made through Dec. 25, however, shoppers can get gift cards sent to themselves or their recipients free of charge.
Target also offers options to send gift cards by email or to the recipient's mobile number. Target gift cards can be loaded with a wide range of balances from $5 up to $1,000, and the balance can be checked online and in stores.
9. Toys'R'Us Gift Card
Toys'R'Us gift cards are redeemable at both Toys'R'Us and Babies'R'Us, making them a good choice for kids and parents alike. These can be purchased and sent online, or shipped for free in values of $10 to $1,000. Gifters can even customize physical cards with their own message, photo or design for a fee of $4.50.
10. Best Buy Gift Card
If you're a member of the My Best Buy program, you'll get rewards for giving Best Buy gift cards to others. However, balances for Best Buy gift cards are more limited than others on this list — the minimum is $15 and the maximum is $200. E-cards, however, can be loaded with up to $250.
Best Buy offers e-gift cards and physical gift cards with free shipping. Cards valued at $25 or more qualify for free two-day shipping.
5 Worst Gift Cards
When it comes to gift cards, most retailers do a great job — after all, it's their business to make it easy and simple for you to make purchases. Some of the gift cards we surveyed, however, fall short of expectations.
Some of these cards are cash gift cards from major credit card issuers, which are the only gift cards we surveyed that charge purchase fees and have expiration dates. Others on this list are retailer gift cards that are difficult to purchase or use.
Click through to see the five worst gift cards you should avoid buying for the holidays.
1. MasterCard Gift Card
MasterCard gift cards are essentially cash cards that can be used like a debit card and are redeemable at a variety of merchants wherever MasterCard is accepted. These cards are also offered by different banks and financial servicers, which means that the terms vary widely. GiftCards.com, for example, has a purchase limit of $500 on its MasterCard gift card, while KeyBank allows shoppers to load a card with a balance as high as $2,500.
These cards have a few major drawbacks. They are one of the few cards we looked at that charged a fee, usually between $3 and $5 depending on where the card is purchased and how much is loaded on it. MasterCard gift cards also have expiration dates, after which the card can't be used. Any funds remaining will not expire for at least five years, but the cardholder will need to transfer them to a new card to access their money.
2. American Express Gift Card
American Express gift cards have many of the same drawbacks as MasterCard gift cards. These cards carry purchase fees, which we found can cost up to $6 depending on where you purchase the card and for how much. These cards also expire by the date on the card and will need to be replaced to access any remaining funds. Funds do not, however, expire.
An American Express gift card has a major benefit over many gift cards, however. It's redeemable everywhere American Express is accepted. But gift card buyers might want to just save themselves the purchase fee and give cash — as legal tender, it's accepted almost everywhere, even as a deposit to the recipient's bank account.
3. H&M Gift Card
While H&M is a popular clothes retailer, its online presence has lagged behind competitors; H&M didn't start selling merchandise online, for instance, until 2013.
When it comes to gift cards, H&M is still playing catch up. H&M recently started offering gift cards for purchase in its online store, but only sells physical cards that will have to be shipped to the receiver. H&M also doesn't allow gift card recipients to redeem their gift cards at its online shop; these cards can only be used at physical locations.
4. Google Play Gift Card
While the Google Play gift card is for a digital service, oddly enough the Google Play store itself does not sell digital gift cards that can be sent to others. Google Play also does not ship its own physical gift cards or allow users to gift digital content. Shoppers can buy store credit for the Google Play store, but this credit can only be applied to your account.
If you are buying Google Play gift cards as holiday gifts, your best bet is to head to one of the retailers who sell the physical cards, such as Walmart, Best Buy and Target. Some of these even allow shoppers to order Google Play gift cards online and have them shipped for free. The Google Play card has a fairly narrow limit of balances that can be loaded, from $10 up to $100.
5. eBay Gift Card
eBay can be a great place to find online shopping deals during the holiday season, but its gift cards are not a selling point. The site had one of the lowest maximum balances of the cards we surveyed, selling gift cards with balances only as high as $200 with a minimum balance of $5. Shoppers can find cards from $1 to $500 from certain channels, however, like national and local retailers, an eBay spokesperson confirmed.
The eBay gift card is also inconvenient to redeem. The recipient will need to have a PayPal account to redeem the card, even though shoppers can often make purchases on eBay.com using just their credit card. If the recipient doesn't have a PayPal account, it will be a hassle to redeem the card as he will need to create a new account to do so.
Updated Nov. 30, 2015: Previously this article listed eBay at No. 3 among the worst and incorrectly stated that eBay did not have an online system to check balances. This slide and eBay's ranking has been changed to reflect information from Jenny Jeansonne, head of retail and B2B partnerships at eBay.
Methodology: GOBankingRates surveyed gift card offerings from 30 major retailers and providers based on 10 factors that measured the convenience of purchasing these gift cards, redeeming them, and avoiding costs. This survey favored the following factors: (1) no purchase fees, (2) no expiration dates, (3) the chance to earn rewards with a gift card, cards that (4) had low minimum balances and (5) high maximums, (6) cards that could be reloaded, and (7) cards that could be redeemed at multiple retailers. GOBankingrates also considered if retailers offered (8) digital gift cards, (9) shipped gift cards free of charge and (10) had an easy online system to check gift card balances. Each gift card and retailer was scored on these factors and ranked according to an overall score. The ranking of the worst gift cards was adjusted on Nov. 30, 2015, based on updated information from the companies included in the list.