Gift cards: Opportunities and issues for retailers
Sales of gift cards continue to increase with each passing year. While consumers flock to gift cards for their flexibility, businesses have embraced them as a means to increase sales, improve cash flow and manage inventory. But with the growth in use of gift cards also comes an uptick in scrutiny and regulations, especially within the past year.
Grant Thornton LLP’s white paper, Gift cards: Opportunities and issues for retailers, explores the areas of risk and opportunity gift cards can bring to retailers and outlines how new rules from the IRS and the Federal Reserve Board provide retailers and gift card issuers much-needed guidance. Issues covered include:
- managing unclaimed property liabilities
- identifying possible state income tax problems
- accurately recognizing income from unredeemed gift cards
- mitigating exposure under IRS rules and guidance
