The Five Best Gift Cards

BOSTON (TheStreet) -- Gift cards should be judged by how quickly they clear out your shopping list.

In a National Retail Federation survey this year, 22% of people who said they would abstain from buying gift cards said they would do so because the considered cards "impersonal." Sadly, that's kind of the point. The 77% of people surveyed who will purchase a gift card for someone else this year are looking for something practical, not personal, to give in a sluggish economy.

Gift cards will be the most-popular choice among holiday consumers this year, according to American Express' ( AXP) Spending and Saving Tracker. Fifty-eight percent of people surveyed by American Express said they planned to buy them this year. Overall, 19% of consumers will devote most of their holiday budget to gift cards this season.

Not just any card will do. Sanj Raj, chief executive officer of the gift card auction site DFWbid.com, says his site has lost money on gift cards for Nintendo Wiis and Apple ( AAPL) iPods. Consumers are sticking to pragmatic offerings from Wal-Mart ( WMT) and Target ( TGT), among others.

"We have moms, dads, grandparents and college kids using our site," Raj says. "The economy during the last couple of years has pushed these people to be more financially wary of what they buy."

Even the most sensible cards can have drawbacks. The NRF said 13% of people who refuse to buy gift cards worry about expiration dates and other fees, while 5.3% fear the recipient would lose it or never use it.

Many retailers nixed expiration dates and monthly inactivity fees after new rules from the Federal Reserve Board limited fees and restrictions. However, those policies could force many retailers to scale back refillable gift cards and force banks and credit card companies to add or increase purchase fees on their gift cards.

"I bought three Best Buy ( BBY) gift cards for my children and the benefit to Best Buy is that it can only be used in one place," says Rick Fischer, financial services partner at Washington D.C.-based firm Morrison & Foerster and Washington counsel for Visa ( V). "People who give gift cards in the future may have to make a decision between retailers because they can't just give a gift card that is accepted where MasterCard ( MA) is accepted."

Until that's hashed out, here are the five best gift cards for the difficult-to-please or nominally important people in your life: >> See the five best gift cards.

Best retailer card: Costco Wholesale ( COST)

Denominations: $25-$1,000

Purchase fee: No

Monthly fees or expiration date: No

Macy's ( M) and Gap ( GPS) may let you use their cards at more locations, and Best Buy and Sears ( SHLD) will let you use theirs online, but Costco's Cash Card gives consumers two things the others don't: bulk products and gas.

No matter how much the Fed would like folks to believe we're out of the recession and that last year's record gas prices were an aberration, there's still heavy emphasis on frugality this holiday season. While you have to become a Costco member to reap the benefits once your card is exhausted, a breadth of products including groceries, electronics, books, furniture, gas and even funeral items gives their card more value and variety than their competitors'.

Best gift card by a bank or credit-card issuer: American Express ( AXP)

Denominations: $25-$3,000

Purchase fee: $3.95; $4.95-$6.95 for special occasion cards

Monthly fees or expiration date: No

This wasn't even close. Since American Express dropped the expiration dates and monthly fees on its gift cards earlier this year, the appeal of its plastic presents has only expanded. Considering the cards can be used anywhere in the U.S., Puerto Rico and the U.S. Virgin Islands and at any place that takes American Express (except cruise lines, casinos and ATMs), it's as good as a lump of cash. Even if the card passes the "valid thru" date on the front, American Express will send the holder a new one for the remaining balance if requested.

Best e-card: Amazon ( AMZN)

Denominations: $5-$5,000

Purchase fee: No

Monthly fees or expiration date: No

Not only do you not have to go to a store, you don't even need to waste a stamp sending a card. Like several other retailers, Amazon will e-mail its card to your desired recipient. Unlike other retailers' cards, Amazon's can be used to download music, video and Kindle book files, and just about anything else offered by Amazon and many of its third-party sellers. Granted, not everybody's playing along ( Eddie Bauer, for example), but Amazon's e-card offers the most bespoke gifting and buying experience among its peers.

Best restaurant gift card: Darden Restaurants ( DRI)

Denominations: $10-$250

Purchase fee: No

Monthly fees or expiration date: No

Some nights you want to dress up and eat a 24-ounce porterhouse. Some nights you want to go to the take-out counter in your pajamas and pick up your "Tour of Italy." Fortunately, populist chain Darden Restaurants recognizes the need for both.

Where other chains wage class warfare by dividing their gift cards between high-end offerings and their low-budget casual counterparts, Darden cards can buy all-you-can-eat shrimp at Red Lobster or a Delmonico steak at the Capital Grille.

Best charity gift card: TisBest Philanthropy

Denominations: $10-$5,000

Purchase fee: $1.95

Monthly fees or expiration date: No

The next time a friend or family member says they would contribute more to charity if they only had the money, call them on it. When you give a TisBest card, you take away the recipient's ability to spend its value on anything but the 250 charities in the TisBest network. Beneficiaries include UNICEF, the ASPCA, the Sierra Club, Paralyzed Veterans of America, the Alzheimer's Association, the St. Jude Children's Research Hospital and others.

Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.

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