Do you give cash refunds on gift certificates?

[agoodman]

Reminder: Many states (not every one) have introduced laws which state that GC's may not expire, so SOMETIMES although it;s a PITA it may be better off to refund - but I like the idea of offering the gift shop purchases before offering a refund.
And GC money is a "liability" on your books which should "technically" be declared as such in your taxes.

 

[Generic]

It's not a hassle at all for us to keep track of GC's if there should be a remaining balance, it's all on an Excel spreadsheet..

It's not a hassle at all for us to keep track of GC's if there should be a remaining balance, it's all on an Excel spreadsheet.

I don't pay any attention to the balances, either, they're all on my rez software and I can get a report whenever I need one. What's a hassle arises when selling. And here I'm supposed to turn in any outstanding GC monies to the state after 4 years. So, in cases like that it becomes a hassle keeping track of what monies are due to the state. (And then getting that money back when/if the GC shows up here to be used!)
When we bought we asked for payment of outstanding GC's from the PO's. We ended up with a fair number of valid GC's showing up that we hadn't been paid for. I'd rather not deal with this on the selling end. If I can zero out the balance by giving the guest $30 it's worth it to me for multiple reasons.
I look at outstanding balances that are not full GC's as some sort of bill I owe. I don't like the feeling!
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And here I'm supposed to turn in any outstanding GC monies to the state after 4 years. So, in cases like that it becomes a hassle keeping track of what monies are due to the state. (And then getting that money back when/if the GC shows up here to be used!)

I get around this by not expiring them, that way they're always valid. I understand what you're staying about selling, it's definitely something to consider if you're going to be doing that in the near future. Although the way things are looking how will any of us ever sell, because how can anyone get financing to buy? Banks are a very dirty word in this house right now.
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Ours never expire. State law. If they did expire I could just keep the money after x years! I do know the PO's put expiry dates on the GC's because we've gotten some of them 2-3 years after they expired. But, we got paid for them, so no problem honoring them.
There's a reason right there to change the name of the business when you buy.
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The worst B&B in town didn't bother to change her name... now she has an uphill battle with her reputation and I don't even want to know how often people ask the question of where the name came from.
A clean new reputation, a new name, a new history.... definitely worth it. Not to mention, no liabilities.

 

[toddburme]

But you lose anyone who wants to come back as they can't find you.

 

[Alibi Ike]

But you lose anyone who wants to come back as they can't find you..

But you lose anyone who wants to come back as they can't find you.

Sometimes if you're the worst deal in town, that's not a bad thing. But, to avoid that problem, you keep the website and redirect it to the new name/new website until you capture enough of the former traffic to let it drop. Keep the phone number, if that's a big source of bookings. Keep the email but redirect it.
We were lucky that the place we bought had good reviews and good repeat biz. Some of the places we looked at needed a total overhaul and had awful reviews. If you can't put 'under new management' everywhere, it can be better to start over.
However 'succession' businesses also take on any liabilities of the previous ownership. THAT can be a very bad thing if you find out after closing that the PO's owed money/had outstanding liabilities they didn't disclose and that weren't found during the due diligence phase.

 

[agoodman]

Ike I agree with you on most points except that taking over a business name may not necessarily mean that you take over the liabilities - it may depend on the geographical state / the purchase agreement / the finacial state of the business and finances (bankruptcy? foreclosure sale?) as well as how the business is set up and many other factors.for example "Anne's B&B" may just be a DBA name under John Q Public Inc

 

[Alibi Ike]

Ike I agree with you on most points except that taking over a business name may not necessarily mean that you take over the liabilities - it may depend on the geographical state / the purchase agreement / the finacial state of the business and finances (bankruptcy? foreclosure sale?) as well as how the business is set up and many other factors.for example "Anne's B&B" may just be a DBA name under John Q Public Inc.

Must be a state thing then. We kept the B&B name but as a DBA with our own corporation. The PO's had a different corp with the same DBA. This state considers that a succession. We ended up with their liability.

 

[JBloggs]

But you lose anyone who wants to come back as they can't find you..

But you lose anyone who wants to come back as they can't find you.

The worse part of this whole thing is when I ask guests about B&B experiences, memorable ones (which I always ask if I find they frequent them) they RARELY even remember the name, they do remember the town or location. Just thought I would bring that fact up. They can describe it in detail, but not the name, only a few remember the name and those are the ones who go back year after year.

 

[JBloggs]

Warning to new innkeepers:
You do need to make sure your business is ALL YOURS or you will pick up the previous owners junk in some areas. This means get your own sales tax # immediately before you have guests under your roof, and everything else under your name/corporation/partnership. I can tell you that when we got the county tax bills it was all under the last owners corporation, which was not the same name as us, and we were still told it was THE BUSINESS< SO WE NEED TO PAY IT. Business furnishings. well all of that was different now, wasn;t it? Didn't matter, at the county level it was all under ONE ID NUMBER. I had to go to battle over it for a long long time. As far as they were concerned it was the same business. You were just the manager now.
I had to fight on another level at the state as the taxes were filed under the past owners corporation tax ID #, anything I did was under THEIR NUMBER? This was totally wrong, but took a huge effort to change it. Worse part was the corporation they had was this B&B PLUS another private contracting business, joint.

 

[Alibi Ike]

But you lose anyone who wants to come back as they can't find you..

But you lose anyone who wants to come back as they can't find you.

The worse part of this whole thing is when I ask guests about B&B experiences, memorable ones (which I always ask if I find they frequent them) they RARELY even remember the name, they do remember the town or location. Just thought I would bring that fact up. They can describe it in detail, but not the name, only a few remember the name and those are the ones who go back year after year.
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they RARELY even remember the name, they do remember the town or location.

Given the number of phone calls I receive asking if I can help someone figure out where they last stayed, I totally agree! They remembered the town, they have no idea of the name of the place.

 

[Alibi Ike]

Warning to new innkeepers:
You do need to make sure your business is ALL YOURS or you will pick up the previous owners junk in some areas. This means get your own sales tax # immediately before you have guests under your roof, and everything else under your name/corporation/partnership. I can tell you that when we got the county tax bills it was all under the last owners corporation, which was not the same name as us, and we were still told it was THE BUSINESS< SO WE NEED TO PAY IT. Business furnishings. well all of that was different now, wasn;t it? Didn't matter, at the county level it was all under ONE ID NUMBER. I had to go to battle over it for a long long time. As far as they were concerned it was the same business. You were just the manager now.
I had to fight on another level at the state as the taxes were filed under the past owners corporation tax ID #, anything I did was under THEIR NUMBER? This was totally wrong, but took a huge effort to change it. Worse part was the corporation they had was this B&B PLUS another private contracting business, joint..

And even if you get all of your own ID's, be prepared to fight for years to have them be correct at the state & federal levels. We were lucky that when the town bills the PO's didn't pay came thru, the town was perfectly ok with sending the bills to them and starting fresh with us. We had to go a few times to talk about the 'furnishings' as quite a few things the PO's claimed were 'business furnishings' they took with them. No way we were paying taxes on things we didn't have here!

 

[Proud Texan]

We make our gift certificates for "one-night stays" or "two-night stays" and they are charged at our higher weekend rate. They are non-refundable.
We also treat them same as cash when it comes to cancellations. If they cancel last minute, the amount that would have been levied as a penalty is subtracted from the face amount of the gift certificate.