Financial Accounting Blog

Tuesday, January 13, 2004

The Cincinnati Enquirer reports although gift card receipts are higher this year than ever before, the sales cannot reflect earnings.
Retailers can't book gift-card sales until the cards are actually used, under generally accepted accounting principles, which means most cards that were purchased as gifts before Christmas haven't shown up as sales.

"Approximately 85 percent of all gift-card usage occurs within the two weeks following Christmas,'' said Mike Brewer, a spokesman for Louisville-based Stored Value Systems Inc., one of the nation's leading providers of gift cards and gift-card services.