Therein lies the allure of the gift card, which has become a staple during the holidays and other gift-giving occasions.

Kessler (right) said she likes to give and get the plastic. In her wallet are a collection of cards that still carry value. There's money left to spend at Sephora and SanSai Japanese Grill, and for a manicure and pedicure.

"Some of the cards in my purse now I need to dust off and use," said Kessler, a 24-year-old St. Louis Hills resident. "I'm positive that there are cards that I haven't used at all, or some I've only used once and may have three or four dollars left. Everyone is like that."

Kessler seems intent on keeping track of her cards and using up every last dollar of value. But not everyone does that. And therein lies the problem with gift cards.

Nearly $5 billion of the total amount that givers loaded onto gift cards last year was expected to go unspent by recipients, according to TowerGroup, a financial services consulting firm. That lost value, referred to as "spillage" by those in the retail industry, amounts to about 6 percent of all money spent on cards. That's down from a high of 10 percent in 2007.

There are a range of reasons why gift card receivers don't spend the money. People lose their cards, or after they have used all but a fewer dollars, they toss them away out of frustration upon learning that the leftover value can't be redeemed for cash.

Redemption Rates Vary

This is the season when many people who received a gift card over the holidays redeem their present. Local businesses said it's still too early to tell what percentage of the money made in Christmas and Hanukkah gift card sales will be spent in their stores --- there's often a rush right after the New Year to spend, followed by a lull.

Some stores said they don't track redemption rates or couldn't easily calculate the data. Still, with gift cards on the minds of many shoppers and retailers, what better time to check in with local businesses that have made such tabulations. Keep in mind, there are many ways to define the term "redemption rate," and these definitions are mentioned below.

Here are some of the results:

-- Hillary Dutcher, owner of clothing store Ivy Hill in the Central West End, reports that six out of every 10 gift cards sold since the store's St. Louis opening in fall 2008 have been redeemed so far in part or full. Put another way, four out of 10 haven't been redeemed at all. She noted that the store sold a number of gift cards over the holidays that likely will be redeemed early this year.

"By March," she said, "once people have had time to come in and use the certificates, the percentage could be more like 8/10 or 9/10, because we likely won't sell as many [gift cards] in the coming months as we did before the holidays."

-- SqWires Restaurant has seen a higher customer redemption rate over the past two years than in previous years, said proprietor Bethany Budde-Cohen. Fewer than one-fifth of gift cards that the restaurant sold have never been spent, and about 28 percent still have some value left on them, she said.

-- In the two years that the St. Louis Originals, a consortium of locally owned restaurants, has offered gift cards, about 60 percent of the value of the cards has been redeemed, said Budde-Cohen, who is on the group's board. Gift card purchases rose by 10 percent in 2009 from 2008, she said.

-- About 75 percent of the money spent on Straub's gift cards in 2008 was redeemed that year, while in 2009 the total was about 98 percent, said Debbie Burns, the company's controller.

-- Imo's Pizza typically has about a 95 percent redemption rate on its cards, according to Ed Musen, a partner for the marketing agency that represents the company.

-- Both Schnucks and Left Bank responded that customers use almost all the value on their gift cards.

And where does the spillage go? The money mostly returns to the retailers who sold the cards and the banks that loaded them, as is explained in a recent New York Times article .

A Mixed Picture of Popularity

Because of the weakened economy, the amount spent on store gift cards was expected to decline for a second straight year in 2009, according to TowerGroup. (The firm predicted a slight increase in general-purpose gift card sales, such as those sold through malls.) High-end retailers and local stores were expected to be hit hardest by the consumer cutbacks.

Some shoppers were also likely scared away by gift cards that went unspent when major retailers like Linens 'n Things and Sharper Image went out of business.

Stores that remain in business and have felt the crunch because of slowed consumer spending have kept close track this year of their gift card sales.

"My take on gift cards is that since book sales are down in general, it stands to reason that gift cards will correspond to that," said Kris Kleindienst, co-owner of Left Bank Books. "And in our case, I'm right. I think that as folks are shuffling to e-books, or using the library more, our challenges to stay in their sights are greater." (The store does sell e-books on its e-commerce web page.)

At Left Bank, gift card sales accounted for about 6.5 percent of revenue in December 2008 and about 6.8 percent of revenue in 2009, Kleindienst said. For all of 2009, Left Bank's gift card sales were about 1.8 percent of revenue, which means there's a notable spike in December.

Some local retailers reported that gift card sales were flat or up, at least over 2008 levels. YMCA of Greater St. Louis gift cards sales through December were almost exactly flat to sales in 2008, said Julie Catron, vice president of marketing and membership. The same was true at SqWires, Budde-Cohen said.

In Novemver, for the first time, the Partnership for Downtown St. Louis began selling gift cards that people can use at restaurants, hotels and other downtown spots. The group had sold more than 1,000 cards, and roughly 20 percent of the total value of all the cards had been redeemed as of mid-January, said Matt Schindler, economic development association with the partnership.

Selin Malkoc (right), an assistant professor of marketing at Washington University's Olin Business School, said that anecdotally, she's noticed a higher percentage of gift givers opting to buy the plastic cards over the past several years. Consumers find the cards to be an easy way to stick to their spending budget, she said.

Lori Willis, a spokeswoman for Schnucks, said she's noticed more customers buying gift cards for themselves and then spending down the total as a way to track spending. They are also giving them to their college student children as a way to help them keep to a food budget.

While adhering to a budget is often the goal, Malkoc said research shows that splurging is often common among people who are spending the cards.

"We act differently when we're spending cash or money on a gift card," Malkoc said. "We're more indulgent when spending gifts because of just that reason -- it's a gift and we can justify spending beyond what the card is worth. There's also a prediction bias at work. When I buy a card, I predict that as the recipient I would use it. But when it's my turn as the actual recipient of a card, I don't use it as much."

Malkoc said selling gift cards is a win-win for retailers -- they benefit from the unspent money and from the extra foot traffic, especially when customers spend over what the card is worth. Companies that sell plastic cards to retailers are up front about taking advantage of common pitfalls for the consumer in their own sales pitch: Gift cards can be a major boon to vendors because of the extent to which cards aren't redeemed and customers carrying them overspend.

For the consumer, there may be other ways of squandering value. Beyond the prospect of losing track of the cards there's the possibility that people who redeem them after a year of inactivity can be subject to modest fees. Straub's, for instance, deducts a fee of 50 cents a month from the remaining balance after a year of non-use. Schnucks' corresponding charge is $1.50 per month.

In some cases, consumers can even find that the card has expired or that there are fees associated with buying and loading the card. (Both of these tend to be less the case with local stores like the ones interviewed for this article).

There's no specific law in Missouri that covers gift card expiration dates, but "misrepresentations or unfair practices" are prohibited under the state's Merchandising Practices Act, said Nanci Gonder, a spokeswoman for the Missouri attorney general's office. The office notes that an estimated $75 million worth of gift cards could lose their worth because of companies going out of business.

The Federal Reserve late last year announced proposed guidelines that would restrict the fees and expiration dates that apply to many gift cards. The proposed rules, issued as a way to implement the gift card provision of the Credit Card Accountability Responsibility and Disclosure Act of 2009, would prohibit fees on cards unless there has been at least one year of inactivity, no more than one such fee is charged per month and the consumer is given clear disclosures about the fees.

The proposal also states that expiration dates for the cards must be at least five years after the date of issuance, or five years after the date when the funds were last loaded.

Many retailers already follow these rules. The question is whether consumers pay attention to the fine print -- and how much money they will continue to leave on the table.