The beauty of cash is that it is often used quickly. Gift cards, however, often wind up in sock drawers, unused. A study by TowerGroup estimated that $8 billion was left behind on unused gift cards in 2006.

While most store cards are free (except for the gift amount, of course), most banks charge a fee of $2 to $10 for their cards. Many bank cards also come with an expiration date, at which point whatever balance is left on the card disappears. Other banks charge monthly maintenance fees that nibble away at the cash you placed on your little nephew’s card.

Bank cards can be used to pay for virtually any transaction, but cardholders often run into trouble on purchases that exceed the card’s balance. That’s because systems used by many sites and retailers cannot handle multiple forms of payment when a gift card is involved.

Some people think giving gift cards is a bad idea. Of course, anything is a bad idea if not used appropriately. All of these issues notwithstanding, gift cards from stores and banks can still beat cash for online shoppers — provided you know the card’s terms in advance and bring the cardholder up to speed.