$41 Billion: The total amount of money on gift cards that went, or is likely to go, unspent from 2005 to 2011.

Gift cards are becoming an increasingly popular holiday present, but as the market grows in value the question of what happens to money that goes unspent still looms large.

Some 80% of respondents to a National Retail Federation survey said they planned to buy gift cards during the 2011 holiday season, while for the fifth year in a row they remain the most requested present with 58% of shoppers saying they’d like to receive a gift card. The market for gift cards is growing along with their popularity. Financial-consulting firm TowerGroup estimates that gift-card sales will reach $100 billion in 2011.

Consumers aren’t the only ones who love gift cards. The retail industry also has many reasons to embrace them. Stores can’t count money received from the gift givers who purchase the cards as revenue until they’re redeemed, but this offers a number of benefits. First, it sets up a source of cashflow in the weeks after the holidays as recipients make their way to stores to spend the money on their cards.

Gift-card redemptions also often further add to retailers’ coffers. As anyone who’s used iTunes can attest, it’s awfully hard to spend exactly $15 or $25 on items that cost 99 cents or have sales tax added. Analyst Brian Riley of TowerGroup estimates that more than a third of gift-card purchases go over the face value of the card.

The vast majority of the money put on gift cards gets redeemed, but Riley estimates that since 2005 $41 billion in money on gift cards has been lost or is likely never to be cashed in. The lion’s share of money lost on gift cards from 2005-2009 came from fees and expiration dates. All that changed with the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009 that was signed into law last year. The Act largely forbids fees on cards sold by retailers (cards given away as promotional items can still charge fees), and it prohibits expiration dates less than 5 years after the card is purchased.

But what happens when the purchases go under the face value and then sit in the junk drawer in perpetuity, or when grandma, who can barely check her AOL email, gets an Amazon.com card that she’ll never redeem? Some $3.4 billion of the $41 billion lost on gift cards from 2005-2011 resulted from cards being lost or simply left unused. The Credit CARD Act doesn’t do much to address that, and as the market grows that number will grow along with it.