balance. This remainder is then either forgotten about or disregarded as being immaterial. Whatever the reason, these unredeemed cards can add much to a bottom line, should business’s they be allowed to recognize it. Gift cards do have a downside however. Any retail store that uses gift cards can fall victim to fraud, either due to customers or employees perpetrating the fraud. Customers can shoplift cards, either using the cards themselves or stealing the authorization information from the magnetic strip with an electronic device. Stolen, fake, and empty cards are also frequently sold on auction sites or bargain sites. Employees are just as likely to steal cards, but also have other opportunities to commit fraud. They may pretend a card is empty or deactivated customer’s and convince the customer to hand over the card. Or they may use sleight of hand to swap the customers card with an empty one. Losses from fraud can be significant, but the benefits a company gains from its gift card program often far outweigh the losses. Tax Accounting Implications
balance. This remainder is then either forgotten about or disregarded as being immaterial. Whatever the reason, these unredeemed cards can add much to a business’s bottom line, should they be allowed to recognize it. Gift cards do have a downside however. Any retail store that uses gift cards can fall victim to fraud, either due to customers or employees perpetrating the fraud. Customers can shoplift cards, either using the cards themselves or stealing the authorization information from the magnetic strip with an electronic device. Stolen, fake, and empty cards are also frequently sold on auction sites or bargain sites. Employees are just as likely to steal cards, but also have other opportunities to commit fraud. They may pretend a customer’s card is empty or deactivated and convince the customer to hand over the card. Or they may use sleight of hand to swap the customers card with an empty one. Losses from fraud can be significant, but the benefits a company gains from its gift card program often far outweigh the losses. Tax Accounting Implications
Hendrickson_thesis.docx