Re: [SL] Gift Vouchers

[Hart N. <hn...@bi...>]

>On Tuesday 24 April 2007, Roy Nicholl wrote:
>>  George,
>>
>>  As I indicated in my post on Friday, and others expressed much more
>>  eloquently,  gift cards/vouchers and the like are simply a means of
>>  'capturing' a future sale ... you trade a voucher for a $20 bill.
>>  This puts the $20 bill in your bank account, but also puts a
>>  liability against your books as the voucher/gift card can be redeemed
>>  at some future point in exchange for goods or services provided by
>>  the business.  If you want, you can think of the voucher as a
>>  contract for the future delivery of a good or service ... but it is
>>  not a sale.
>>
>>  There is no sale until the voucher is redeemed ... so no GST/HST (or
>>  any other VAT) to be remitted.   If you are issuing vouchers that
>>  have an expiration, then there will be some additional accounting to
>>  remove the liability when the voucher expires (mechanically this is
>>  quite similar to what happens to a corporation when stock options
>  > expire), but there will not be any VAT to remit in this instance.

Transferring un-redeemed G.V.s from the liability account to income 
may (will) attract tax.  (The taxman always wants his due.)

An aside on the issues of G.V.s and tracking same.  You may want to 
track outside of the accounting system redemption may range over 
fiscal years and become difficult to track.  A simple method is to 
have a serially numbered multi-part form (duplicate or triplicate) 
with a stiffer, fancier first sheet for the "amount" and a validating 
name or initial (it is "cash") to be added at the time of sale with 
the purchaser filling in the "name" and "from"at their leisure.  A 
second copy with or w/o the sales receipt number on it is added to 
the day's cash receipts (establishing an audit trail ) the duplicate 
G.V.is for tracking and anti-fraud -alteration purposes.

An alternative G.V.is to use read-made selected denomination 
certificates, but I prefer the former for several reasons (can 
discuss offline)

Hope this helps.

Cheers,

Hart North

>  >
>>  Roy
>>
>>  On 23-Apr-2007, at 11:41, George Osvald wrote:
>>  > On Monday 23 April 2007, Paul Tammes wrote:
>>  >> Ashley J Gittins wrote:
>>  >>> On Mon, 23 Apr 2007, George Osvald wrote:
>>  >>>
>>  >>> The actual ruling on vouchers is here if you need more detailed
>>  >>> information:
>>  >>> http://law.ato.gov.au/atolaw/view.htm?locid='DGS/GST2000D22/NAT/
>>  >>> ATO/fpF4'
>>  >>> &PiT=99991231235958
>>  >>
>>  >> Apart from legal and accounting issues, I suppose it is safe to
>>  >> say that
>>  >> a gift-voucher is (for the customer) as good as cash as for payment
>>  >> purposes. Only cash can be spent anywhere, where the gift-voucher
>>  >> is on
>>  >> a per ship or per sales-chain basis.
>>  >> Why anybody would want to limit the choices of the friend
>>  >> receiving the
>>  >> gift is beyond me. Rational would be to give cash.
>>  >>
>>  >> That being said, we humans are social and not rational beings, so
>>  >> exchanging a 50 dollar bill for a 50 dollar gift certificate does
>>  >> happen
>>  >> in the real world. Economically speaking (GST or VAT) there is NO
>>  >> value
>>  >> added in the transaction as I see it.
>>  >> So I see no reason for charging VAT. That would be just as foolish as
>>  >> charging VAT when I change my tenner in loose change for the vending
>>  >> machine. The VAT transaction is the vending machine, and there the
>>  >> sale
>>  >> is VAT included.
>>  >>
>>  >> Hopes this clarifies matters.
>>  >
>>  > Actually yes that is a pretty good explanation/comparison. Thank
>>  > you. Now I
>>  > have to figure out how to track them. I will be able to see how
>>  > much of the
>>  > gift vouchers' value has been redeemed but how do I know which
>>  > ones? I could
>>  > search for the voucher number presented to my by the cutomer and
>>  > then either
>>  > re-post the original invoice with a note attached to it (no good)
>>  > or I could
>>  > create a new invoice with the same number as the voucher number for
>>  > the goods
>>  > purchased.
>>  > Actually could I sell vouchers as normal tax invoices (with GST)
>  > > and then if
>>  > they are redeemed create a new invoice with the same number and a
>>  > negative
>>  > amount to the value of the voucher? (plus anything extra) If they
>>  > are not
>>  > redeemed then I would simply keep them as sales.
>
>I understand this now Roy but I am still looking for an easy way how to track
>individual vouchers. By looking at a liability account I will see how much
>has been given away/redeemed. I still need to know which voucher has been
>redeemed. At this stage giving the sale the same invoice number as the
>voucher is probably the way. I would have to close all vouchers within a
>financial year though.
>
>
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>>  > --
>>  > George
>>  > AUSTRALIA
>>  > http://www.okstudio.com.au
>>  >
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