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Best ways to support local bike shops right now


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7 minutes ago, Big_papa_nuts said:

The problem being that bike shop employees, who have no special training or equipment, now have to deal with five hundred percent more customers. I worry for all the shop workers who will catch this thing because people are bored.

Not sure about other shops but BSS has been pretty stringent on their precautions.   If you're bringing your bike in for service, you put it on a rack next to a tent, walk away, and they wipe it down and take it in.  You either wait in your car for online orders or pay at the entrance to the shop if you're picking a bike up.   No one actually goes in the store (at least at Research location)

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2 hours ago, Barry said:

I didn't see liquor listed, unfortunately. In many states, folks are getting their hands on some hard to come by allocated whisky through restaurant sell-offs. I wonder if it is included, but not explicitly stated? 

One thing we discovered is that the pre-mixed drinks sales that were happening for a few days got shut down real quick. Now we're getting the margarita mix in a cup and the tequila in a separate single-serve sealed bottle (aka airplane booze). Definitely not worth the money but this is a joint we want to see stay open; so we're continuing to purchase them. We just pour everything together and freeze before putting in the blender for frosty frozen margaritas. Of course I just buy the Everclear on my own to boost the octane. 

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7 hours ago, Barry said:

I didn't see liquor listed, unfortunately. In many states, folks are getting their hands on some hard to come by allocated whisky through restaurant sell-offs. I wonder if it is included, but not explicitly stated? 

I discovered today that all the stuff that shows "not available" when you try to order online from liquor stores is actually a marketing limitation. If you call them up you can order all the stuff that is not available on the website 😉

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1 hour ago, AustinBike said:

I discovered today that all the stuff that shows "not available" when you try to order online from liquor stores is actually a marketing limitation.

I'm specifically talking about things like BTAC* and PVW*.  Restaurants and bars across the country are selling their stock to keep the business going.

 

*if you don't know those initialisms without looking them up, then this is too nitch of a discussion for us to continue. 

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1 hour ago, Barry said:

I'm specifically talking about things like BTAC* and PVW*.  Restaurants and bars across the country are selling their stock to keep the business going.

 

*if you don't know those initialisms without looking them up, then this is too nitch of a discussion for us to continue. 

I’ve a line on both of those right here in town. Private stash, but I get to sample!

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We already have some like that with microfiber towels and rubber bands. Yeah, it is pretty cheesy, but it is one step better than nothing. My prediction is that by the end of April we get the "OK to be out" signal but that a face mask is required. Like to the point that being out without one is subject to arrest or fine. Cloth masks for everyday use. It won't be N95 but it will allow people to venture out without (dramatically) undoing all that we have done to keep the numbers down. But thins thing will have a long tail and we'll see infections for months.

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1 hour ago, Big_papa_nuts said:

Good tip on the news tonight, buy gift cards.

So, I am no accountant, but as I understand it, the company gets the cash, but they don't actually get to recognize the cash until the gift card is actually redeemed. So, buying a gift card is basically an IOU for the most part.

Maybe Chango_loco can weigh in on this, but I think buying gift cards is one of those things that sounds good on the surface but does not really help the way people think that they will.

Edited by AustinBike
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Gift cards result in an asset and a liability.

The cash is now your asset and the promise to deliver goods in the future is a liability. It's like a loan from a customer. But it is an interest free loan. Can't do much better than that.

Well you can actually. I saw an article a year or two ago that big companies that sell gift cards have some algorithm to predict the amount of cards that will be lost and never used. The result, free money!

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12 hours ago, The Tip said:

Gift cards result in an asset and a liability.

The cash is now your asset and the promise to deliver goods in the future is a liability. It's like a loan from a customer. But it is an interest free loan. Can't do much better than that.

Well you can actually. I saw an article a year or two ago that big companies that sell gift cards have some algorithm to predict the amount of cards that will be lost and never used. The result, free money!

When I worked at Dell there were issues with things like warranty. If you paid for a 3-year warranty the company had to hold the money in escrow 

"SEC Staff Accounting Bulletin no. 101 generally requires the transfer of product (merchandise) as a necessary condition for revenue to be recognized. SEC Staff Accounting Bulletin no. 104 provides additional guidance. When a retailer sells a gift card to a customer, the payment for a future purchase is received upfront, but transfer of merchandise is delayed at the consumer’s discretion. So, instead of recognizing actual revenue on the sale of gift cards, retailers record a deferred revenue liability on the balance sheet for the cash exchange until the gift card is redeemed."

https://www.journalofaccountancy.com/issues/2007/nov/accountingforgiftcards.html

Are you an accountant? I think we need to have an accountant weigh in on this. As for the breakage, this is a real thing, but you need enough history to justify that, a bike shop probably does not have the data to justify that to the IRS. The easiest way to deal with breakage is to put an expiration date on the gift card.

Before we all start running out and buying cards, let's see what an accountant has to say. 

 

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There's a difference between cash income (received at the moment of sale of a gift card), and tax accounting - treatment of the revenue from the sale of same, which can stretch out over a year or three. I believe our POS software recognizes when an individual gift card is entirely or partially redeemed. As far as I know, when you make the initial sale, you get the dollars right away.

 

* I'll edit the post to say that most of my experience lies in the area of gift card theft and forgery, which is an entire field of expertise in itself (I'm not the expert).

Edited by TAF
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2 hours ago, AustinBike said:

Are you an accountant?

No, not a CPA. But I had six semesters of accounting in school and did all my own in my business. Some of my classmates took one more semester and did get a CPA. 

The question was rather or not buying gift cards from businesses is helpful. The answer is yes. Interest free loan, cash on hand, guaranty of future sales. All good things. 

AustinBike said earlier, "So, I am no accountant, but as I understand it, the company gets the cash, but they don't actually get to recognize the cash  SALES until the gift card is actually redeemed. So, buying a gift card is basically an IOU for the most part."

Fixed your statement to make it all true. In bookkeeping terms "sales" are credits and the balancing debit is "cash."  A transaction of any kind needs an entry on both sides of the balance sheet. Debit the liability of the gift card account when you realize a Credit of eventual sales at redemption.

Or (just to illustrate bookkeeping, because it rarely happens) a customer comes in with his gift card and wants to sell it back to the store. Debit the gift card account the same, but now the Credit is to your cash account. Just like any loan. Now the only benefit to the store was the free use of the cash for however long the gift card was out. Much better, and way more common, is to have the gift card redeemed as sales of course.

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The question is whether the company has immediate access to the cash now or whether it has to hold it in reserve.

If you have to put it in reserve, then the cash is adjusted against the reserve. Again, neither of us is a CPA. I took many semesters of accounting in both high school and college, that is what prompted my immediate question. This is not how the debits and credits work but instead a question of whether reserves need to be made, essentially nullifying the cash.

Let's just see if an actual CPA can answer this.

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I go to the bank to get a loan because I have to pay the utility bill or my power will be cut. I am not going to hold the cash obtained from that loan in reserve. I need cash now. I, as a businessman, am hoping and planning that future sales will allow me to repay that loan.

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