Gift Card sales are exploding.  Retail stores have been responding to the demands of consumers as sales of gift cards — about $1 billion US when they were introduced south of the border in 1995 — exploded to about $70 billion this year.

In Canada, the retail sector is expected to bring in just under $59 billion in 2006 holiday sales, according to a study by accounting firm Ernst and Young.

Gift cards will make up a healthy chunk of those sales &8212; in 2005, a study conducted for the Retail Council of Canada said 19 per cent of shoppers would buy gift cards. But, in a news release, the council said that more Canadians would likely shell out for the convenience of not having to search high and low for that special gift.

The most successful gift card in North America may be the one offered by Starbucks. The company estimates that 10 per cent of all the caffeine hits served up by its North American baristas is paid for by gift cards. It's also the only retailer that will let you use your gift card to buy a gift card for someone else.

About 96 million Starbucks cards have been activated since they were launched in 2001 — and customers have reloaded those cards more than 38 million times.

Wal-Mart Canada expects gift card sales to explode as well. The company reports that by the end of November 2006, money loaded on gift cards waiting to be spent increased by 30 per cent over the same period a year earlier.

With competition increasing for the gift card dollar, companies are getting more creative in their offerings. Aeroplan is offering $100 and $250 cards that can be redeemed for merchandise in various retail outlets. The cards can be had for either 14,000 or 33,500 Aeroplan miles.

The priciest gift card around may be the $100,000 Four Seasons Gift Card. When the chain got into the gift card game in 2005, it was available in denominations up to $1,000. But cards worth $2,500 and $5,000 were quickly added.