Retailers are creating ever-more flashy designs to entice shoppers.
In Pictures: 10 Fun Holiday Gift Cards Which is more appealing: an image of Santa bopping around to an iPhone or a reindeer with gadgets hanging off its antlers?
That's the type of dilemma Best Buy (nyse: BBY - news - people ) faces each year. "You wouldn't give the same greeting card over and over," says Anne Platt, Best Buy's senior director of marketing for gift cards.
Yahoo! BuzzBest Buy doesn't want people to give the same gift card every year, either. Like many major retail chains, it is releasing unusual designs to encourage shoppers to open their wallets. This holiday season, the Minneapolis-based consumer electronics giant is offering more than 50 types of gift cards, including one made from recycled plastic and one that doubles as a set of speakers for an MP3 player.
In Pictures: 10 Fun Holiday Gift Cards
Millions of people are expected to purchase gift cards for the holidays, despite the recession. A survey by the National Retail Federation found that 53.5% of U.S. consumers plan to buy gift cards, with shoppers spending an average of $147.33 on them. The economy, however, will dent sales to some degree. The federation also predicts that total gift card sales will fall nearly 6% to $24.9 billion year-over-year, in part because people will choose to hunt out in-store bargains instead.
03/18/2009 6:40PM ET
BATS Real-Time Market Data by XigniteRetailers say they are remaining optimistic and point out the steps they've taken to make their cards appealing. Best Buy, which has offered gift cards for 13 years, introduced Spanish-language cards this fall, including some for Quinceañera celebrations and a "three kings" or "tres reyes" holiday design.
Best Buy also launched a card made out of recycled plastic with the motto, "Spoil yourself. Spare the earth," for environmentally conscious customers. Starting this season, Best Buy will also collect redeemed gift cards for recycling.
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Another Best Buy design is meant to please the ear as well as the eye. The card comes with a built-in speaker and a jack for headphones. "It's like an extra gift," Platt says.
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In past years, Best Buy has sold cards shaped like metal slap bracelets and ones that played video. As long as the design can carry a bar code, Best Buy will consider it, Platt says.
Target (nyse: TGT - news - people ) follows a similar strategy. Since 2004, it has offered a line of flashy cards it calls "WOW! Cards." The point, says spokesman Eric Hausman, is to build in an "extra element of surprise," such as sounds, lights, music or interaction. This year, there are seven WOW! cards, including one styled like a jukebox that plays songs and one that is actually a tin with M&M's inside. Some double as games, such as an igloo-shaped one that is actually a maze with a ball and a "magic box" that is also a flip puzzle.
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Visit The Forbes.com Digg ChannelTarget's standout WOW! card packs a 1.2 megapixel digital camera capable of taking 50 photos. Recipients can print the pictures for free at Target stores. The catch: Buyers must load at least $50 on the card.
It's the first year Minneapolis-based Target has done a camera card, though it has created MP3 player cards and music-playing keyboard cards in the past. Hausman says Target typically stocks 20 new cards and 20 previously existing cards, with a larger selection of new cards during the holidays. Holiday designs are retired each year.
Best Buy also has a policy of redesigning holiday cards each year. Platt heads a team dedicated to tracking gift card trends and translating them into unique designs. New designs are tested with focus groups and tweaked before manufacturing. "We view them as trend products," she says. "We want them to feel new and fresh."
Ken Hawkins, director of the site GiftCardTracker.com, says he has spotted scratch-and-sniff gift cards in the past. He also sees a trend toward e-gift cards or virtual gift cards, which boil the card down to a bar code--no plastic necessary. "It's the best thing for last-minute shoppers," he says. "Retailers that haven't already moved in that direction will."
Some consumers may be wary of purchasing gift cards due to the shaky economy. Hawkins recommends that consumers choose retailers carefully, consider buying bank-backed gift cards or just encourage recipients to use the cards right away.
Shoppers should also be aware of a gift card's limitations before purchasing them. Some cards have expiration dates or hidden fees.
Another Hawkins tip: Some retailers, such as restaurant chains, offer purchasers small incentives like $5 coupons for buying gift cards. Why not reward yourself?