Comment by tart-lemonade
7 months ago
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.
7 months ago
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.