The reason so many of us love gift cards -- they're a lot like cash -- is also the reason they can be hard to replace when they're stolen or lost. Some retailers, including Wal-Mart, even put the onus exclusively on the consumer and refuse to replace lost or stolen gift cards altogether. However, in most cases, there are steps you can take to ensure that you haven't just thrown away $50 if that gift card accidentally ends up in the trash.

With an estimated $66 billion in gift cards purchased in 2008, chances are good that you're hanging on to one or two (or five or six), and you may not know precisely where some of them are. If your card is lost or stolen, most retailers (see chart below) are sympathetic -- but only if you can prove that you actually purchased the card.

"The receipt is your first line of defense if you lose a card," says Kwame Kuadey, founder of GiftCardBlogger.com. "If you lose the receipt and lose the card, you're pretty much out of luck."

What to do when your gift card goes astray
If you held on to your receipt -- or if the generous soul who gave you the gift card in the first place can produce one -- contact the retailer immediately. Most maintain toll-free numbers (available on the card itself or, since that's gone, on the store's Web site) manned by customer service representatives who can cancel the card and work on issuing you a new one.

If it's a store card, you shouldn't have to pay for the replacement; similarly, American Express now offers to replace lost or stolen gift cards for free (if you have the original card number). With other bank-issued gift cards -- for instance, one from Visa or MasterCard -- expect a replacement fee of $5 to $15.

No receipt? A few stores may offer a replacement over the phone if you have the gift card number. Otherwise, even a credit card statement proving that you made a $50 transaction at The Gap won't be sufficient, since the purchase could have been for anything.

Your only other outs include trying to get reimbursement from PayPal or your credit card company if you ordered a card online and it never arrived, or replacing a gift card stolen from your home through your homeowner's or renter's insurance coverage. (Check your policy for coverage details.)

Prevention and protection
Even with a receipt in hand, it's a hassle to cancel and then replace a lost or stolen gift card. Here's how to keep your cards safer now and how some of these steps can make your life easier if a card does go missing:

  • Track your card in a virtual wallet. At sites such as LeverageCard.com and PlasticJungle.com, you can record gift card numbers and PINs and track balances online. Plus, you may earn extra protection from the site itself. For instance, PlasticJungle.com will contact a retailer on your behalf to replace a lost card that's registered in your online wallet.
  • Register your card with the retailer. Starbucks cardholders who register their gift card number at Starbucks.com get automatic balance protection and hassle-free card replacement in case of loss or theft. Also, if they use the card in the store after registering, they earn perks such as free refills on drip coffee or two hours of complimentary Wi-Fi.
  • Shop online. To make a purchase online, you only need the gift card number, which could help if you misplaced the actual plastic. "I order pizza a lot, always online or over the phone, so there's no reason for me to ever have that piece of plastic," says Jennifer Mathe, co-founder of LeverageCard.com. "I register the card, and then I shred it." Even Wal-Mart allows customers to input gift card numbers on its Web site and make online purchases later.
  • Use your card quickly. One survey estimates that one-third of gift cards -- over $20 billion worth -- still haven't been spent six months after they're received. "People hold on to these cards and forget where they put them," says Kuadey. "Using the card immediately not only prevents it from getting lost, but protects you if the company goes bankrupt."
  • Safeguard your card from fraud. "A gift card looks exactly the same whether it has a zero balance or $100 on it," says Tina Henson, founder of PlasticJungle.com. Even if you have the card itself, someone could steal your balance. High-tech fraudsters scan or copy card numbers in stores, then spend the money online as soon as the card is activated, leaving you with a worthless piece of plastic. When you purchase a gift card, watch out for scratches or signs of tampering. Or avoid the problem altogether by purchasing e-certificates from online retailers such as Amazon.com. 

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