Gift card gotchas: The plastic gift set all new records, but you need to know about stipulations

CLEVELAND - If you either gave a gift card or got one for the holidays, you helped make history.

The National Retail Federation says gift card spending reached an all-time high this season. But there are things to remember about your cards so you don’t come up empty handed.

"I got one from JCPenney,” said Patricia James. “As a matter of fact, I'm going in there and using it now," she added looking over to the JCP store at South Park Mall. She likes gift cards for the holidays. "I can do gift cards or money. Doesn't matter. It all spends," she said with a laugh.

People told us they like the convenience factor of the cards. “Just for the simple fact if you don't know what to get somebody, there you go," said Leah Manfredi.

Getting a gift card for the holidays can sure be a sweet treat, but just remember if you don't spend it within a certain amount of time, sometimes the value of your cards can drop.

"I had a McDonald's gift card one time,” said Kaleigh Palya. “And I kept it for like two years and it was only worth like half of it," she told us.

Consumer Reports says even though recent federal legislation requires retailers to honor cards for five years, monthly inactivity fees can kick in after just one year. That drains the value of the card long before it expires.

Caleb Manfredi has been known to hold onto his cards. "I usually just wait to stack up the money to buy something I want," he explained.

And he's not alone. Consumer Reports says about $1.8 billion worth of gift cards purchased last year are gathering dust and likely will never be redeemed. That's not good news for those who enjoy the gift of plastic.

"Yeah, I like getting gift cards…because I don't have to pretend to like the gift,” said Megan Kennedy.

Well, now you can't pretend that RTV6 sister station NewsChannel5 didn't give you a fair warning.

"That's a good thing,” said James.

Consumer Reports also says gift cards with bank logos like American Express or Visa can be used at a wide variety of stores, but there is often an activation fee or purchase charge that is usually around $4 to $6.

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