I’ve implemented those for the next-largest coffee chain. They did the same thing as Anthropic here, for the reasons everybody gave already. Taking money in exchange for future service is a pain to account for if it never gets collected. If somebody loads up a gift card with $100 and then destroys the gift card, you don’t want that $100 to stay on your books forever. It’ll just keep mounting up and up over the years until you have a massive theoretical debt that in practice can’t ever be collected. So they put expiration dates on so they can clear those things off their books. It’s a completely ordinary thing to do, it’s not a rip-off.
> That’s not really a justification, it’s just describing their chosen accounting convenience. Plenty of companies manage unredeemed balances without expiration dates - it’s a business decision, not an unavoidable necessity. Calling it “ordinary” doesn’t make it fair to customers.
Un redeemed gift cards are a liability for the issuer in perpetuity in many US states including CA. In many others the expiry is at least 5 years from the date of issuance.
Retailers have historical data on gift card redemptions and, using this data, can recognize portions of the unspent value of the gift cards as revenue when that portion is unlikely to be redeemed.
In addition to this, gift cards have a specific carve out in consumer protection laws, "business credits" do not and fall under accounting practices, specifically ASC 606, and specifically around "breakage", as as tart-lemonade is referencing.
unlike Anthropic, iTunes and Starbucks are profitable.
suppose iTunes gets $1 from every $5 spent there. if Apple sold a $50 gift card, it can pocket $10 and not worry about it.
Anthropic, OTOH, sells their API at loss, so unused credits mean losses that await to be materialized. it is unprofitable for them to let you keep the compute bucks forever.
I’ve implemented those for the next-largest coffee chain. They did the same thing as Anthropic here, for the reasons everybody gave already. Taking money in exchange for future service is a pain to account for if it never gets collected. If somebody loads up a gift card with $100 and then destroys the gift card, you don’t want that $100 to stay on your books forever. It’ll just keep mounting up and up over the years until you have a massive theoretical debt that in practice can’t ever be collected. So they put expiration dates on so they can clear those things off their books. It’s a completely ordinary thing to do, it’s not a rip-off.
Here’s a concise rebuttal you could use:
> That’s not really a justification, it’s just describing their chosen accounting convenience. Plenty of companies manage unredeemed balances without expiration dates - it’s a business decision, not an unavoidable necessity. Calling it “ordinary” doesn’t make it fair to customers.
Un redeemed gift cards are a liability for the issuer in perpetuity in many US states including CA. In many others the expiry is at least 5 years from the date of issuance.
Retailers have historical data on gift card redemptions and, using this data, can recognize portions of the unspent value of the gift cards as revenue when that portion is unlikely to be redeemed.
In addition to this, gift cards have a specific carve out in consumer protection laws, "business credits" do not and fall under accounting practices, specifically ASC 606, and specifically around "breakage", as as tart-lemonade is referencing.
unlike Anthropic, iTunes and Starbucks are profitable.
suppose iTunes gets $1 from every $5 spent there. if Apple sold a $50 gift card, it can pocket $10 and not worry about it. Anthropic, OTOH, sells their API at loss, so unused credits mean losses that await to be materialized. it is unprofitable for them to let you keep the compute bucks forever.
> Anthropic, OTOH, sells their API at loss,
Sources? It is widely believed that their fixed-price plans lose money, but last I heard API (price per token) had positive margins?
Maybe in some universe. Companies like this grow so fast you have no idea, and any prognostication about making money is just frankly bullshit.
Growth hides all sins, as long as the investors keep ponying up.