Revenue Recognition Revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable and collectability is reasonably assured. Direct channel revenue from sales of products ordered through the Companys retail internet sites and the corresponding freight revenue are recognized upon delivery and receipt of the shipment by our customers. Reserves for estimated product returns are recorded based on historical return trends and are adjusted for known events, as applicable. As of February 2, 2019 , the liability for estimated returns was $20.1 million and the corresponding balance of the right of return asset for merchandise was $9.8 million . Gift cards, gift certificates and merchandise credits (collectively, gift cards) issued by the Company are recorded as a deferred income liability until they are redeemed, at which point revenue is recognized. Gift cards do not have expiration dates, but substantially all gift cards are redeemed within a 12-month period. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recognized in Net sales over time based on the historical redemption patterns and historically has not been material. For the thirteen weeks ended February 2, 2019, the opening balance of deferred revenue related to gift cards, gift certificates and merchandise credits was $90.1 million , of which we recognized approximately $19 million as revenue during the period. For the twenty-six weeks ended February 2, 2019, the opening balance of deferred revenue related to gift cards, gift certificates and merchandise credits was $92.7 million , of which we recognized approximately $29 million as revenue during the period. The closing balance of deferred revenue related to gift cards, gift certificates and merchandise credits was $121.9 million , as of February 2, 2019. The Company offers numerous customer loyalty programs for participating customers based on their level of purchases. For every qualifying purchase, the Company defers a portion of the revenue until the loyalty points are redeemed. The transaction price is allocated between the product and the loyalty points based on the relative stand-alone selling price. Loyalty points accumulate until predetermined thresholds are met at which point the loyalty points can be redeemed as a discount off of a future purchase. Substantially all loyalty points are redeemed within a 12-month period. For the thirteen weeks ended February 2, 2019, the opening balance of deferred revenue related to outstanding loyalty points was $36.1 million , of which we recognized approximately $20 million as revenue during the period. For the twenty-six weeks ended February 2, 2019, the opening (after adjusting for the impact of adopting ASU 2014-09) balance of deferred revenue related to outstanding loyalty points was $35.4 million , of which we recognized approximately $25 million as revenue during the period. The closing balance of deferred revenue related to outstanding loyalty points was $34.8 million as of February 2, 2019. Revenue associated with merchandise shipments to other third-party retailers is recognized at the time title passes and risk of loss is transferred to customers, which generally occurs at the date of shipment. In addition to retail-store, direct channel and third-party sales, the Company's segments recognize revenue from (i) licensing arrangements with franchised stores, (ii) royalty payments received under license agreements for the use of their trade name and (iii) credit card agreements as it is earned in accordance with the terms of the underlying agreements. The Company accounts for sales and other related taxes on a net basis, thereby excluding such taxes from revenue.