Here’s an interesting article detailing the ways in which companies structure store gift cards to take advantage of the unwary, or even fail to disclose the fees and conditions that can eat up the card’s value before it is redeemed.

M.P. Dunleavey reports that both Kmart and Darden Restaurants, owner of Red Lobster and Olive Garden, settled with the FTC after complaints that the companies had failed to disclose fees and expiration dates that caused their gift cards to lose value or expire without warning. In 2006, a research group found that of the $80 billion American consumers spent on gift cards, ten percent went unredeemed. It is unclear, however, how much was attributable to fees and expiration and how much was loss, failure to redeem, and other cardholder-driven factors.

Some states have stepped in to regulate gift cards. According to the nonprofit Consumer Action, some states prohibit expiration dates (with limited exceptions), and others prohibit service fees, at least in the first few years of the card’s life. Another wrinkle is that the retailer may not be allowed to keep the entire unclaimed value. In some states, the value of unused gift cards could be considered abandoned property after a certain number of years, and some or all of the money could escheat to the state. According to Bankrate, this could happen even if the card has not expired according to its terms.

On the other hand, for an entertaining look at the economic loss created by poorly-selected presents, here’s a review of a study by Joel Waldfogel. The study is premised on the idea that if the value of the gift is, in the recipient’s eyes, less than the price paid by the gift-giver, the disparity is a deadweight loss, estimated at an alarming ten to eighteen percent of all holiday spending.