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by wenc 2284 days ago
Barbershops etc. are a class of business that gift cards aren't the best fit for because they have finite, nonscalable capacity.

You buy a gift card for a timeslot, which helps the barbershop's cashflow now, but when you redeem it later, you're clobbering it's future income.

A barber can work overtime and open up more slots, but he might never catch up. Unless you have really short expiry dates or low redemption rates. In which case the gift cards become more like a donation, which under the current circumstances wouldn't be a bad thing.

1 comments

> You buy a gift card for a timeslot, which helps the barbershop's cashflow now, but when you redeem it later, you're clobbering it's future income.

This is most business though. You have unearned revenue which helps because you have accounts receivable and you're waiting on cash. It bridges the gap.

I agree partially on barber shops though because few have AR. Still, they get revenue upfront which can cover hard costs during this time.