Comments on: New California Gift Card Law CA SB 250 http://www.hustlermoneyblog.com/new-california-gift-card-law-ca-sb-250/ Credit Cards, Cash Bonuses, Free Money Sat, 11 Feb 2012 03:16:46 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: RacerX http://www.hustlermoneyblog.com/new-california-gift-card-law-ca-sb-250/comment-page-1/#comment-16446 RacerX Sat, 15 Dec 2007 10:16:31 +0000 http://www.hustlermoneyblog.com/new-california-gift-card-law-ca-sb-250/#comment-16446 Just a quick FYI. Generally speaking retailers do not make a bunch of money by holding the sub $10 amounts. Under GAAP accounting rules (which govern all US public Companies)Gift Cards are a liability, not an asset. They cannot charge off that amount for a long time, up to 7 years! So why do they do it? It ties up your "open to buy $$$." If you get a Target gift card, your have to shop at Target to redeeem it! Just a quick FYI.

Generally speaking retailers do not make a bunch of money by holding the sub $10 amounts.

Under GAAP accounting rules (which govern all US public Companies)Gift Cards are a liability, not an asset.

They cannot charge off that amount for a long time, up to 7 years!

So why do they do it?

It ties up your “open to buy $$$.” If you get a Target gift card, your have to shop at Target to redeeem it!

]]> By: RacerX http://www.hustlermoneyblog.com/new-california-gift-card-law-ca-sb-250/comment-page-1/#comment-16442 RacerX Sat, 15 Dec 2007 09:12:12 +0000 http://www.hustlermoneyblog.com/new-california-gift-card-law-ca-sb-250/#comment-16442 One thing to know about gift cards. Retailers generally do NOT make billions on the leftovers a lot of times because according to GAAP accounting rules, Gift Cards are a liability, not an asset. Busineses that are GAPP compliant (all public ones - hopefully!) cannot take the little extra amount for years off of their books for years and years. This rule will help some businesses since small cash amounts are at least portable and will generally be spent as redeemed. So why would retailers want these things then? It ties up your "open to buy" dollars with said retailer. If you give someone a Target gift card...guess where they will shop, Target; and generally go over the card amount. One thing to know about gift cards. Retailers generally do NOT make billions on the leftovers a lot of times because according to GAAP accounting rules, Gift Cards are a liability, not an asset. Busineses that are GAPP compliant (all public ones – hopefully!) cannot take the little extra amount for years off of their books for years and years.

This rule will help some businesses since small cash amounts are at least portable and will generally be spent as redeemed.

So why would retailers want these things then?

It ties up your “open to buy” dollars with said retailer. If you give someone a Target gift card…guess where they will shop, Target; and generally go over the card amount.

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