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by ThePadawan 1383 days ago
> Why they would expire I don't know.

I have a (not directly) related hypothesis I heard stated once about vouchers and bonus programs once.

If the operator takes your $20 to buy a metro card, they made $20 of income. The $20 of "value" the card now holds is accounted for.

Assuming a metro card never expires would means that the operator would have to account for this value to be in existence for perpetuity.

If 1% of metro cards never expired but still had 20$ on them, there would be an ever-growing amount of money-to-be-accounted-for which (I've been told) is a bit of a nightmare since it's technically a liquidity, but obviously unavailable to the company.

It's obviously shitty for the customer, but there's seemingly some sort of (tax/business) logic behind it.
1 comments
projektfu 1383 days ago
It would be available with some risk management. If you prepay something (meal tickets, gift cards, etc.) that becomes a current liability to the company. On use or expiration, income is credited and the liability is debited.

The company can spend the cash as they see fit but if the item is refundable or use of the item incurs costs, they need some cash on hand to handle people digging up old cards and using/refunding them.

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ThePadawan 1383 days ago
> The company can spend the cash as they see fit but if the item is refundable or use of the item incurs costs, they need some cash on hand to handle people digging up old cards and using/refunding them.

Right, and if you're heavily investing, you would want to minimize the necessary cash on hand.

I remember hearing that's why a supermarket had a scheme recently where they would redeem (virtual) bonus points for a rebate directly applicable to your purchase (as opposed to accumulating until some arbitrary limit before that would happen) - simply so the company could figure out what percentage of people would take that chance to redeem the points.

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projektfu 1382 days ago
In the US, discounts applied to taxable items reduce the sales tax. If you're given a credit instead, it's applied after the sales tax. If a store gives you $5 non-refundable credit, they end up paying some sales tax for you. If they give you a $5 coupon, then the whole amount can be applied to a subtotal before tax.

However, the coupon has no accounting value beyond its $0.0001 face value.

I'm sure there are even more oddities and complications a tax accountant can mention that I'm not even aware of.

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