| Live chat by Boldchat |
|
|
|
|
|
|||||
 |
 |
 |
 |
 |
 |
|
|
|||||
*** Gift-Certificate Fees Irk Legislator *** Budget POS has built a great gift-certificate feature and loyalty card option right into Cash Register Express.
My view is that gift cards and loyalty guides are a great advantage for any store. The purpose of gift cards and loyalty cards is to keep customers coming back and to give customers a quick and easy alternative to paying for items.
We pointed out that on average, 15 percent of all gift or loyalty cards never get cashed. They are in people's basements, drawers, or lost somewhere in space. This is certainly not a reason for retailers to issue loyalty cards, but there is no doubt that the uncashed cards certainly more than pay for the actual cost of the cards.
My local newspaper had an interesting article (similar to articles that have appears in many local newspapers and The Wall Street Journal).
According to an article in my local paper (The Journal News), Lord & Taylor gift cards expire. So you give your Mom a $25 gift card that she finds in her drawer two years later and she tries to use it. The clerk say, "Sorry, your card has expired." The $25 gift that you gave to your Mom is now worthless. One of our local legislators spoke out against this practice in the paper.
One of our local malls has a mall card. The mall charges a $2.50 fee per month dormancy fee for unused cards (until the card eventually has $0 value).
Lord & Taylor and my local mall are only an example of many stores and malls that follow this practice. Most stores and malls do not currently have an expiration date or a fee for dormancy. Some lawmakers are now trying to ban the practice. I am certainly against charging a fee or having an expiration date.
However, there is one defensible reason for having an expiration date. Once you issue a gift-certificate, you now have an obligation to your customer. For example, if you issue a $25 Gift-certificate and have receive $25 in payment for this gift-certificate, you now owe your customer $25. I am not exactly sure how the accountants handle it (and am not sure if they agree on how to handle it), but you now have a $25 liability on your books. So, you have $25 in cash and have a $25 liability on your books until your customer redeems it. If a customer has not redeemed the gift certificate in, let's say five years, can you remove the liability? I am afraid you will have to speak to a CPA to get the answer. Actually, I am sure that you will get several answers from several CPAs.
At any rate...Gift certificates and Loyalty Cards are a great revenue generator for all retail stores. Budget POS can provide you with Loyalty Cards that look just like a Credit Card with your logo for about $1 each. These cards do get your customers back into your store. Personally, I would never charge a fee or have an expiration date, but, that's your choice.