Although target already has the money once a gift card has been purchased, they will not recognise the money as revenue until you use the card.
Suppose my lawn mowing guy charges $50 each time he mows my lawn, and he comes 12 times a year. In January I just transfer him $600 because I don’t want to muck around with smaller payments all the time.
When he calculates his “revenue” for January, should he include the whole $600? It would be more accurate to set aside the $550 he hadn’t really earned yet, and recognise that once he actually does the work.
There’s more geaky accounting stuff I could say, but in summary if you want to send a message to Target management, refrain from using gift cards during the boycott.
They don’t get to record it as revenue, but they do get to sit on the cash, earning interest etc on it. Companies loooove gift cards. It’s free money.
For a company health perspective, it’s better to use it so they’re at least put the cost-of-goods. Best option would be to sell the gift cards to someone who was going to shop there anyways.
Not really. The explanation is somewhat complex.
Although target already has the money once a gift card has been purchased, they will not recognise the money as revenue until you use the card.
Suppose my lawn mowing guy charges $50 each time he mows my lawn, and he comes 12 times a year. In January I just transfer him $600 because I don’t want to muck around with smaller payments all the time.
When he calculates his “revenue” for January, should he include the whole $600? It would be more accurate to set aside the $550 he hadn’t really earned yet, and recognise that once he actually does the work.
There’s more geaky accounting stuff I could say, but in summary if you want to send a message to Target management, refrain from using gift cards during the boycott.
They don’t get to record it as revenue, but they do get to sit on the cash, earning interest etc on it. Companies loooove gift cards. It’s free money.
For a company health perspective, it’s better to use it so they’re at least put the cost-of-goods. Best option would be to sell the gift cards to someone who was going to shop there anyways.