Supermarket Price Comparisons.

[DTCwordfan]

Any Supermarket executives on here or accountants?

Walk into most supermarkets, check out and find yourself with a paper voucher that may be for a few p to several pounds.

This means that they owe me money from an accounting perspective, that I am a creditor......

However, given that many folk lose their vouchers, how do they handle this in their accounts?

Given the amount of money involved, Sainsbury for example handles 24 mln transactions per week, at an average of say 75p, this equates to some 18 million......

In Camping Gaz, we had a hell of an issue with this, as bottle deposits were treated as such, the amount of money involved, even after being able to finance the business from 50% of the sum, the other 50 percent held in liquid but safely invested for further financial benefit, meaning that capital employed was negative. The issue also being that the average time for cylinder retention was 13.5 years and very few could return the original receipt for a full deposit reimbursement (without interest - that went to the benefit of the company)......

This 'metal management' was as important as the margins of the business....and I would think that the supermarket voucher business is certainly 'significant.'

Any views......

[EDDIE51]

They don't 'owe you money ' the vouchers are just money off coupons for part payment the next time you use that shop.
I don't see any connection with the deposit on a gas cylinder.

[DTCwordfan]

Isn't it the equivalent of a promissary note?

[DTCwordfan]

also impacting on their potential profits.....?

[fiction-factory]

I agree with Eddie on this one. I don't see it as anything other than an incentive for you to shop there again. There is no guarantee you will ever use the voucher. If you do use it then the sale is recorded and the transaction then goes through the accounts. If you don't use it then there is no accounting needed.

[EDDIE51]

I'm not sure what a 'promissory note' is but I think they can be exchanged for cash. A money off coupon can only be used as part payment, it can never be changed for cash.

[EDDIE51]

Found this, a bank note ( £5 £10 $50 etc) is the commonest form of promissory note
https://en.wikipedia.org/wiki/Promissory_note
A bank note says on it 'I promise to pay the bearer on demand' the sum of £10 or whatever. A supermarket money off coupon is NOT a promissory note as you can not exchange it for cash.

[Maydup]

Vouchers usually have a short lifespan, and when redeemed, either come out of the marketing budget or are taken into account in the profit margins.

Gift cards on the other hand are accounted for as cash but after a set number of years, a percentage are written back as lost or unused.

[DaisyNonna]

Usually chuck them

[ToraToraTora]

you have completely mis understood the accounting position here. It is not a promisory note it is an offer of discount on future purchases. They are only relevant to the accounts when redeemed.

[THECORBYLOON]

They must have to account for it otherwise there may be the shambles produced by the Hoover free flights offer that cost them £50m and three executives' jobs.