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Small Business Owners: Gift Card Usage Rate?
Posted on 6/30/17 at 9:33 am
Posted on 6/30/17 at 9:33 am
I am donating some gift cards to a charity function and trying to estimate what will be the actual expense.
What says the OT? Do any of you have experience with calculating a gift card usage rate?
For those that are going to ask:
Small retail business;
Business is less than 5 years old but profitable;
Seasonal sales;
Gift card amounts will reflect average purchase amount.
Donating to St. Jude's fundraiser
I did your mom
What says the OT? Do any of you have experience with calculating a gift card usage rate?
For those that are going to ask:
Small retail business;
Business is less than 5 years old but profitable;
Seasonal sales;
Gift card amounts will reflect average purchase amount.
Donating to St. Jude's fundraiser
I did your mom
8
Posted on 6/30/17 at 9:34 am to tigerstripedjacket
45% - Wild guess but I have a hunch.
Posted on 6/30/17 at 10:09 am to tigerstripedjacket
I believe you still have to account for 100% of that liability on your books until the cards expire, regardless of the redemption rate.
Posted on 6/30/17 at 10:11 am to tigerstripedjacket
Be sure to donate lots of sonic gift cards. This gives the children an opportunity to throw hands if necessary
Posted on 6/30/17 at 10:25 am to tigerstripedjacket
I sold a ton of gift cards to my customers last year at a discounted rate and around 80% were used. That is high because they are in my stores, and regular customers and still only got up to 80%. I think stores like Target, Walmart etc. get the highest usage because EVERYONE uses something at those stores.
Posted on 6/30/17 at 10:31 am to tigerstripedjacket
It will vary a lot. 80% usage rate would be on the very high end, 50% on the low end. If the people who are at the charity function are people who already use your store, then you will see a higher redemption rate. If you own a very specialized store and the people at the charity event do not fit in your usual customer base, I would expect around 50-60% usage rate.
Posted on 6/30/17 at 10:32 am to tigerstripedjacket
quote:
I did your mom
Who hasn't
Posted on 6/30/17 at 10:49 am to tigerstripedjacket
quote:
I did your mom
Is everyone so desensitized to not even see this?
Posted on 6/30/17 at 11:07 am to tigerstripedjacket
quote:
I am donating some gift cards to a charity function
Are you getting a tax benefit for this? Assuming so since it is St Jude's. Actual expense should be what you donate.
Posted on 6/30/17 at 11:14 am to LoyalTiger
quote:
I believe you still have to account for 100% of that liability on your books until the cards expire
frick any company that issues gift cards with an expiration date.
Posted on 6/30/17 at 11:31 am to Displaced
quote:
frick any company that issues gift cards with an expiration date
I usually agree, especially if it is a short time frame like under 90 days. Most of the ones I see that have one are at least a year out.
I got one not long ago as a gift and it had an expiration date of 2021. I mean, if you haven't used it in 3.5 years, that's on you. It was for a local restaurant and for $25, which would get you a couple of meals there and could be used quickly.
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