In the relatively few years they’ve been around, the use of gift cards has exploded. On the surface, it’s easy to understand why, especially from the giver’s perspective.

First of all, if you’re stumped for what to give someone, they’re a step above the coldly impersonal (but usually appreciated) gift of cash. Instead of conveying the message that “I don’t know you well enough/care about you enough/want to expend the energy required/etc. to buy something more personal,” a gift card can say, “I know you like to shop/eat at ____, so get something there for yourself.”

The cards also allow you to side-step the awkward decision about what size (always dicey for men), color, or model to purchase.

Then there’s the ease of one-stop shopping. You can pick up gift -- a.k.a. “stored value” -- cards for everyone on your list at the grocery store, shopping mall, bank, or even on-line.

And if you really want to play it safe, you can go for gift cards that aren’t tied to any particular merchant. The general-use cards issued with Visa (V) or MasterCard (MA) logos “have the greatest flexibility. You can use them anywhere they’re accepted,” says Ben Woolsey with CreditCards.com, a free Web site that allows you to compare the terms and conditions associated with different credit cards.

However, gift cards are a bit of a Trojan horse. The biggest mistake both givers and receivers make is to think that they are “just like cash.”

They’re not.

Gift cards -- especially those issued by banks -- come with fees and (generally) expiration dates. “We recommend against them,” says Anthony Giorgianni, associate financial editor of Consumer Reports and Money Advisor. Not only does the gift card buyer pay a fee at the time of purchase, account servicing fees may be deducted if the card isn’t spend within a certain period of time.

In Giorgianni’s opinion, what you’re really telling the recipient is, “I can’t figure out what to get you so I’m going to force you to follow a bunch of terms and conditions.”

Gift cards should also not be confused with credit cards.

As Woolsey points out, they “don’t have the same utility as a credit card. There’s no credit line attached. You can’t use one to recent a car of get money from an ATM.”

Even if a merchant accepts MasterCard or Visa credit cards, you might run into trouble using a gift card from the same issuer. For instance, says Woolsey, if you try to swipe a gift card at a pay-at-the-pump gas station “you may be declined because you don’t have enough of a balance.” As he explains, the retailer protects itself by requesting that a minimum amount “such as $75” be pre-authorized. If there’s less than that left on your gift card, you’ll have to get out of your car and pay in person.

Something similar happens in restaurants. When you hand the waitperson your gift card, typically the merchant seeks pre-authorization for 20% more than the cost of your meal in case you want to add a tip when your receipt is returned for your signature. If you pay the tip in cash, the excess unavailable to spend for 2-3 days until the transaction is processed.

According to Woolsey, the same thing happens when you pay via credit card (who knew?), “but with a stored value card you purchase would get rejected if there are not enough funds to accommodate the assumed tip. (Hint: To avoid an embarrassing incident, check the balance on your gift card online or via phone before you head out on your date.)

Furthermore, Giorgianni maintains that it’s hard to completely exhaust the value of a gift card. “It’s difficult using it to the last penny. Some merchants won’t let you do a ‘split tender’ transaction” where you’re paying with two different sources such as a gift card and a check. This is especially true with online and mail order purchases. “It has to do with the way payments are processed,” he says.

But the real concern about gift cards this holiday season is the number of retailers and issuers that have or are in the process of filing for bankruptcy and the lack of protections for consumers.

Next week: Gift card buyers and recipients need to beware. Don’t get left holding a worthless piece of plastic!

If you have a question for Gail Buckner and the Your $ Matters column, send them to: yourmoneymatters@gmail.com, along with your name and phone number. Click here to access the Your Money Matters Archive