Some retailers are offering Gift cards with a few new bells and whistles this year, including cards that flash lights and play songs. Gift cards also are being offered in more locations, including Dillons, Hy-Vee and Walgreens.

If you receive a gift card this holiday season, don’t be surprised if it lights up, sings to you, has a familiar face on it or smells like gingerbread when you scratch it.

Those are some of the new features on gift cards this year offered by retailers including Target, Borders and American Eagle Outfitters.

“They are whimsical and fun,” said Borders spokeswoman Ann Binkley of the gift cards the bookseller is offering. “You can find one that matches people’s personality.”

And with gift cards steadily rising in popularity, you’ll also find the cards in more places, including Dillons, Hy-Vee, Walgreens and even independent businesses like the Townsend Hotel in Birmingham, Mich., which is offering its own gift card for the first time this year.

Holiday gift card sales have soared 44 percent from $17.2 billion sold in 2003 to $24.8 billion sold during the 2006 holiday season, according to the National Retail Federation.

The retail trade group expects gift card sales to reach $26.3 billion this holiday season.

For businesses, gift cards are reshaping the traditional holiday shopping season.

In the past, while most holiday shopping was done in November and December, gift card redemptions have been moving billions of dollars in sales to January and beyond, according to the International Council of Shopping Centers.

Gift cards will be the third most popular gift this year, behind clothing at No. 1 and CDs and DVDs in second place, according to a survey by American Express and the International Council of Shopping Centers.

The survey found that Americans plan to spend 25 percent of their total holiday budgets on gift cards, up from 18 percent last year. And the average shopper will be expecting to buy six cards.

The survey of 1,009 adults was conducted Oct. 25-28 and had a margin of error of plus or minus 4 percentage points.

“Gift cards come with unspoken permission for the recipients to splurge on themselves, and that is making gift cards more appealing, acceptable and personal,” said Alpesh Chokshi, an American Express executive.

Kroger – owner of the Dillons chain – signed a deal last month with Blackhawk Network for its Gift Card Mall at 2,500 stores.

The gift card malls, prominently placed in the center of Kroger stores near checkout lanes, include more than 100 gift cards for retailers such as the Gap, Nordstrom, iTunes, and Bass Pro Shops.

The grocer also offers gift cards to restaurants and local attractions like amusement parks and movie theaters, depending on the store location, said Dale Hollandsworth, a Kroger spokesman.

“We are offering these as a convenience for our customers,” Hollandsworth said. “We are seeing an increased interest from our customers who want to buy them easily. Our expanded array gives them more choices this year.”

Target stores are offering an entertaining array of gift cards this year, including one with a naughty-or-nice meter and a latte scented scratch-and-sniff feature.

Target has 36 holiday and winter-themed cards, plus 14 others for different occasions. The retailer expected to issue 1,250 gift cards every minute the stores were open during the week before Christmas.

“Given the leveraging potential behind the cards and their rising popularity, it’s becoming imperative for retailers to base more of their strategy around them,” said Ed Bentley, regional leader in Dayton, Ohio, for Deloitte & Touche USA’sà retail practice.