Did your Starbuck’s card go to zero??
Update: oooops. Slow computer the problem, and the manager probably meant the APPs. My bad…sorry Starbucks.
While I don’t go to Starbuck’s, Ms, Rdan does on the way to work, and was told her card had $0 balance this morning. She had credited $40.00 last week… it is hard to get a $0 balance right on the money without either forking over cash for the balance (as a reminder to power up so to speak) or having odd cash amounts on the card. The manager told her there are customers reporting card problems.
Anyone else? (Comments after your coffee gladly accepted).
Is this a card or the APP? I know the app had a glitch in recent weeks. It was fixed. I use the app regularly on my iPhone.
This particular was a card…so were complaints.
Could card malfunctions be a handy revenue stream?
Suppose there are 1million cardholders, and the value of their cards at any one time averages around $5. Every time there was a go-to-zero malfunction, the company could recoup five big ones. Or rolling malfunctions could smooth out the stream and make it harder to detect a pattern. Complaint hotspots could be charted and avoided.
Compared to their world profits this would be a small lagniappe, but hey. Pennies mount up.
Noni
http://www.guardian.co.uk/business/2012/nov/12/amazon-google-starbucks-diverting-uk-profits
Card malfunctions are not a revenue stream in the United States or Canada. ULC/UCC Escheat laws (unclaimed property laws) in most states make that impossible.
You never get to take unused giftcard/certificate balances into revenue in most of North America.
“You never get to take unused giftcard/certificate balances into revenue in most of North America.”
J. Goodwin
But the revenue has already been entered into the companies accounts given that they are pre-paid. If the value of the cards is never used, no coffee or sweets,
then the expense that of sets the revenue will never be realized. The company gains at the card holder expense.
No, there’s no revenue.
The payment is a receipt of cash (debit), and the credit goes to a liability account, not to sales.
When the purchase occurs using the card, the company’s liability for gift certificates decreases and they recognize the sale. If the card goes unused, they have to make a good faith attempt to identify and contact you, and if they don’t, then they turn it over to the government, cash is reduced and the liability is closed.
When you call up the phone number on the back of your 10 year old giftcard that you found in the closet, they reactivate it (re-create the liability for you, and a receivable from the government escheat account, then go back to the escheat fund and collect the cash again) because otherwise you would just go directly to the state and collect it yourself.
Receipt of cash is not the same as recognition of revenue in accrual accounting.
So, this thread seems appropriate for a budget ‘deficit’ [OT] from the late Robert Eisner – [published late 80’s but I’ve a notion much still applies.
Budget Deficits Rhetoric and Reality
http://www3.nccu.edu.tw/~95351503/macro2006/course%20info/chapter%202/Budget%20Deficits_Rhetoric%20and%20Reality.pdf
juan,
Send more such nuggets of wisdom please.