They are popular among lazy and indecisive gift-givers and soon retailers in NSW will be forced to honour gift cards for at least three years.
Consumer advocacy group Choice called on all states and territories to match the Berejiklian government's move following Tuesday's announcement of the reforms.
"For too long we have heard from consumers who have struggled with the gift card market, they're left holding useless bits of plastic that might be days or weeks out of date," Choice spokeswoman Erin Turner told reporters.
Australians spend about $2.5 billion a year on the cards but the cash contracts too often burn consumers with an estimated $200 million lost every year.
A 2014 Choice survey found a third of respondents had lost the full value of at least one gift card in the previous three years.
NSW Better Regulation Minister Matt Kean will introduce legislation to implement the reforms - which will also stamp out other hidden charges reducing the balance on gift cards - into parliament this week.
"I want to see people getting the value of what they paid for, that's currently not happening and we'll introduce reforms that give the little guy a fair go," he told reporters.
The push has been slammed, however, by representatives of the retail industry who say it will "significantly disadvantage" consumers and hurt small businesses.
"It is unreasonable to expect small retailers and family businesses to amend their administrative practices and incur extra liabilities on their books simply to respond to unnecessary regulation," Australian Retailers Association director Russell Zimmerman said in a statement.
Choice on Tuesday rebuffed opposition saying the reforms represent a "fair standard".
"Businesses that come out and oppose this sensible reform, particularly big national businesses, have really got to question what priority they give their customers," Ms Turner told reporters.