[fwhorch]

We're struggling to understand how RetailEdge exports gift certificates that have been manually issued.

It seems like gift certificates that are manually issued get double reported somehow.

I think what needs to happen is that we expense these gift certificates as marketing, but it doesn't look like the way RetailEdge exports them is helping us do that.

Right now for every day we manually issue a gift certificate, we go to the general ledger and tweak the transactions to get our gift certificate balance, expenses and sales to work out the way we think it should.

Has anyone else run into this issue?

Fred

[RetailEdge Moderator]

We took a look at how the Gift Cards were getting exported. It may seem a little confusing but it looks like everything is being reported properly. For instance, if you issue a gift card manually in RetailEdge for $50.00 and export this information to QuickBooks, the entries in QuickBooks will be as follows:

Jan 22, 08
Ordinary Income/Expense
Income
Sales -100.00
Total Income -100.00

Cost of Goods Sold
Cost of Goods Sold 0.00
Total COGS 0.00

Gross Profit -100.00

Expense

RetailEdge-DrawerAdjustment 0.00
RetailEdge-NonSalesAdjustment -50.00
RetailEdge-Payout 0.00

Total Expense -50.00

Net Ordinary Income -50.00

Net Income -50.00

The sales number that you are seeing is a combined RetailEdge - Gift Cards Sold/Issued and a NonSales/Backoffice Adjustment (Credit Memo) that was issued. If a gift card was sold normally, you would the total Sales would be -$50 because of an additional Sales Receipt line for the $50.00 collected, the Non-Sales Adjustment would be -$50.00 and your total Net Income amount would be $0.00 (since the sale of a gift card does nothing to your net income because the adjustment balances out the sale). When the sale of a regular item is paid for with a gift certificate, you will see the opposite occur because the adjustment for the gift card is made in reverse.

We're struggling to understand how RetailEdge exports gift certificates that have been manually issued.

It seems like gift certificates that are manually issued get double reported somehow.

I think what needs to happen is that we expense these gift certificates as marketing, but it doesn't look like the way RetailEdge exports them is helping us do that.

Right now for every day we manually issue a gift certificate, we go to the general ledger and tweak the transactions to get our gift certificate balance, expenses and sales to work out the way we think it should.

Has anyone else run into this issue?

Fred

[fwhorch]

Well we have a good news, bad news situation here.

The goods news is that you see the same behavior I'm seeing.

Retail Edge exports the manually issued $50 gift certificate in a way that posts -100 to sales and -50 to expenses. The further goods news is that when you get to the bottom line the numbers do add up. When you minus a minus you get a positive.

The bad news is that this is not how we'd like our numbers reported.

If we have a day when we manually issue a $50 gift certificate and have no other activity, we think sales and profits for that day should be $0, not -$100. We also think our expenses should +$50 (reflecting the expense of issuing a gift certificate), not -$50. That helps us understand what actually happened that day, i.e. we didn't have any sales but we did incur an expense.

These calculations are things that Retail Edge should be able to handle, rather than our bookkeeper. I think all that needs to happen is that manually issued gift certificates get debited from the day's Non-sale adjustments (as an expense) and credited to the gift card account (as a liability). Manually-issued gift certificates should not be included in the day's gross sales at all.

Does my request make sense? Basically, what I'm asking is that Retail Edge report its numbers in a way that makes our profit and loss statements both accurate and understandable.

Please flag this as an issue to be considered in a future release. Thanks!
Fred

[fwhorch]

Just a follow up about how "regular" gift card sales are reported (i.e., ones for which you collect money at the time of sale).

We see something different than described by Bill:

If a gift card was sold normally, you would the total Sales would be -$50 because of an additional Sales Receipt line for the $50.00 collected, the Non-Sales Adjustment would be -$50.00 and your total Net Income amount would be $0.00 (since the sale of a gift card does nothing to your net income because the adjustment balances out the sale). When the sale of a regular item is paid for with a gift certificate, you will see the opposite occur because the adjustment for the gift card is made in reverse.

What actually happens for us makes us happier than the situation described above. Total sales are $0 because the gift card is debited from Gross Sales and credited to the Gift Card account. Non-Sales Adjustment doesn't come into play, so expenses are also $0.

For a day when we sell a gift card and do nothing us, we see Total Sales of $0 and Expenses of $0, which is exactly what we expect on our P&L. On our Balance Sheet, we see our checking account has more money (from the Sales Receipt) and our Gift Card liability account is higher, which is exactly what we expect to see.

We only get our undies in a wad when we manually issue gift certificates. That's when gift certificates get double entered and we see negative sales and negative expenses on our P&L.

Fred