Published: Friday, December 28, 2007 9:30 PM CST

The Associated Press

SPRINGFIELD, Ill. (AP) - A new law taking effect in Illinois on Jan. 1 will make gift cards more consumer-friendly, but residents already may have unused balances waiting for them to collect, officials say.

Starting Tuesday, the expiration date on gift cards sold in Illinois must be five years. Also, no fees can be charged that will diminish gift card value.

“When it comes to gift cards, it is buyer beware,” said Jack Gillis of the Consumer Federation of America, who praised the new Illinois law.

“Banning fees and insuring that gift cards are good for at least five years will go a long way to insuring that these cards really are gifts and not overpriced sales gimmicks,” Gillis said.

Meanwhile, Illinois State Treasurer Alexi Giannoulias is seeking to remind residents that even expired gift cards might be worth cash.

The treasurer’s office is holding more than $5 million in unused gift card balances for Illinois residents. Owners of expired gift cards can go to the state’s unclaimed property database at www.cashdash.net to search for refunds or call 866-458-7327, Giannoulias said.

However, since most retailers do not record the name or contact information for the gift card purchaser or recipient, the unredeemed balances come to the state marked as “owner unknown.”

In such cases, the purchaser or recipient must file a claim with the treasurer’s office using the serial number on the expired gift card.

According to the National Retail Federation, consumers were expected to spend a total of $26.3 billion in gift cards this holiday season, up 42 percent from $18.5 billion in 2005.