Is that explicitly verboten? Can you not claim unspent gift cards as revenue?
I genuinely don’t know, but if it’s allowed or a business’s choice, then I don’t know what the hell the story is here. If they are doing shady accounting practices it’s one thing, but if they are just reporting their revenue/profit from gift cards…who fucking cares?
Gift cards are, by design, a way for companies to increase revenue and profit. They are known to get lost and go unspent. That’s straight cash for the company. The ones that get used, get used at the company.
I’m no law expert, but I have dealt with POS and retailers, and their tax people. My understanding is that you always report the loading of a gift card as a liability. It may be categorized as a different liability because you don’t necessarily owe that money back. As in, most gift cards are non refundable.
When the holder of the gift card redeems it for products, the balanced used gets deducted from your liability and is added to revenue.
If Starbucks were straight reporting it as revenue with no explanation, I can see that being scrutinized. But if they are reporting it as potential revenue, then that’s up to shareholders to weed through that and make investments based on that.
Is that explicitly verboten? Can you not claim unspent gift cards as revenue?
I genuinely don’t know, but if it’s allowed or a business’s choice, then I don’t know what the hell the story is here. If they are doing shady accounting practices it’s one thing, but if they are just reporting their revenue/profit from gift cards…who fucking cares?
Gift cards are, by design, a way for companies to increase revenue and profit. They are known to get lost and go unspent. That’s straight cash for the company. The ones that get used, get used at the company.
I’m no law expert, but I have dealt with POS and retailers, and their tax people. My understanding is that you always report the loading of a gift card as a liability. It may be categorized as a different liability because you don’t necessarily owe that money back. As in, most gift cards are non refundable.
When the holder of the gift card redeems it for products, the balanced used gets deducted from your liability and is added to revenue.
If Starbucks were straight reporting it as revenue with no explanation, I can see that being scrutinized. But if they are reporting it as potential revenue, then that’s up to shareholders to weed through that and make investments based on that.
I’m not understanding the illegality here.
Yea, sounds like a dumb lawsuit and clickbait lazy reporting.