The Consumers' Association of Canada is recommending that shoppers give cash instead of buying gift cards, which often go unused or come with many restrictions for their recipients.

Canadians spent $1.8 billion on gift cards in 2006.
(CBC)

"We recommend you forget about it completely and use cash," CAC spokesman Bruce Cran said.

One recent study in the United States reaffirmed other reports that consumers are losing out to retailers, estimating that 25 per cent of all gift cards go unused. Best Buy Co., for example, reported a profit of $43 million US from unused cards last year. Limited Brands Inc. recorded $30 million US in 2005 revenue because of unredeemed cards.

Canadians spent $1.8 billion on gift cards in 2006, and the amount is forecast to exceed $3 billion this year.

The consumers' association has received numerous complaints about gift cards, which often have unexpected expiry dates, restrictions on cash-back services and administrative fees, Cran said.

If consumers do buy gift cards, it's best to read the fine print, Cran said.

"They should be checking to see there are no charges against the card for the store or group issuing it to mind their money … after all, this is cash," he said.

Ontario and Manitoba have banned expiry dates and administration fees on most but not all gift cards. Other provinces including Alberta are considering adopting similar policies.