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When in doubt go the gift-card route

They may not be personal, but they sure are practical.

That's why half of holiday shoppers plan to give a gift card this season, according to a recent report by Bankrate.

Gift cards are generally considered good for business. They boost sales and create loyal customers. However, they also decrease the opportunity to make additional revenue when shoppers come in with their items to return or exchange and inevitably pick up a few more things.

The increasing popularity of gift cards has curbed some of the appetite for returns, according to Britt Beemer, chairman and CEO of America's Research Group. "We've seen a huge drop in Christmas returns because of the growth of gift cards."

"Aunts and uncles are going the gift-card route, which is reducing the amount of returns altogether," he said.

Last year, consumers returned only 4 percent of their gifts, on average, with two-thirds saying they didn't return any gifts, according to the National Retail Federation.

Gift Cards
Adam Jeffery | CNBC
Gift Cards

On the flip side, the thriving business of shopping online continues to drive the number of returns, said Candace Corlett, president of WSL Strategic Retail, a retail consulting firm. "Returns rise proportionately with online sales," she said.

And more consumers than ever will shop online this year, according to a projection from Visa, which estimates that online buying will increase at least 18 percent over last year.

As much as a third of all web sales get returned, according to retail consulting firm Kurt Salmon, and the rate peaks during the holiday season.

"With online shopping in particular, you are buying things sight unseen. You can't feel the material or press the buttons, therefore return policies are increasingly important," said Jon Lal, founder and CEO of BeFrugal.

But sometimes, even gift cards miss the mark. In that case, the growing business of gift card exchanges can save you big.