Why would you comment on something you know nothing about?
Basic gift card revenue recognition
Companies cannot recognize revenue upon the initial sale of a gift card because of a key revenue recognition principle that states that revenue is recognized when or as an entity satisfies a performance obligation by transferring a promised good or service to a customer.
You should read that article carefully though. They even outline why this is a money maker later:
You might be wondering, how did I get $1650 in total revenue from a $1500 sale? Well, it’s true, because you were able to take 10% of the gift card in breakage income, and on an individual order/customer it can look funny, but on the whole, with your P&L, it’ll be offset by another gift card purchase not being used and money that was “indefinitely deferred!”
So, uhhh, I guess I’d ask, why would you comment on something about which you know nothing?
This is a good read. And also looks like it does mentioned unredeemed gc balance can be (partially) considered as breakage income? ( I don’t know anything about accounting, just want to point this out)
Why would you comment on something you know nothing about?
https://blog.leapfin.com/how-to-properly-recognize-gift-card-revenue
Ha, completely forgot about this.
You should read that article carefully though. They even outline why this is a money maker later:
So, uhhh, I guess I’d ask, why would you comment on something about which you know nothing?
This is a good read. And also looks like it does mentioned unredeemed gc balance can be (partially) considered as breakage income? ( I don’t know anything about accounting, just want to point this out)