Comment on Dark side of Starbucks app: Coffee giant accused of rigging payments to the tune of nearly $900 million over 5 years | Fortune

Lmaydev@programming.dev ⁨11⁩ ⁨months⁩ ago

• Lauchs@lemmy.world ⁨11⁩ ⁨months⁩ ago

  In a former life, I sold point of sale (POS) machines. We got bonuses for selling stuff like gift card add ons and the number one selling point to retailers was that some significant percentage of cards are never redeemed at all.

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  • Potatos_are_not_friends@lemmy.world ⁨11⁩ ⁨months⁩ ago

    A decade ago, I worked on POS systems as a software engineer.

    The selling point was absolutely hawking gift cards. Since we saw the data from companies, and we had a clause that gift cards expired (before the government stepped on) I remember being blown away by how many millions it was in pure profit.

    Gift cards. Bleh

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    • HeapOfDogs@lemmy.world ⁨11⁩ ⁨months⁩ ago

      I have been actively fighting gift cards in my family by giving cash. I’m all, it’s like a gift card but you can spend it anywhere! I took awhile, but little got into it.

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      • Nommer@sh.itjust.works ⁨11⁩ ⁨months⁩ ago

        Same. I’ve managed to convince my family that gift cards just tie you into their ecosystem. With cash you can spend it anywhere.

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  • KevonLooney@lemm.ee ⁨11⁩ ⁨months⁩ ago

    the number one selling point to retailers was that some significant percentage of cards are never redeemed at all.

    That’s not a good thing though. Companies can’t recognize the money as “income” until it’s spent (until the gift card money is used). Until it’s income it can’t be paid as dividends to investors. It’s just stuck in a bank account gathering dust.

    That makes the company look more sluggish. Its “working capital” has increased but income doesn’t go up. So the stats look bad. No, the interest from the money sitting in the bank isn’t worth it. Starbucks isn’t a bank and its investors expect more.

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    • Lauchs@lemmy.world ⁨11⁩ ⁨months⁩ ago

      Nope, the money is counted as income straight away. Think about the process: person gives cash for gift card. Merchant now had the money and a promise to give that amount of inventory at a future date. Some of those promises are never acted upon, in which case merchant has the gift card money AND the merch which they can also sell.

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      • KevonLooney@lemm.ee ⁨11⁩ ⁨months⁩ ago

        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.

        blog.leapfin.com/how-to-properly-recognize-gift-c…

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• ikidd@lemmy.world ⁨11⁩ ⁨months⁩ ago

  I represent that demographic.

  I get gift cards given to me, and put them in my wallet with the best intention of using them, then after 5 years I clean out my wallet and find them. And where I live they don’t expire, so I put them back into my wallet so I can not use them for another 5 years.

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