Gift Cards for Instruction: Our Exclusive Survey Covers Policies, Profits and Accounting Platforms

Dec 20, 2022 | News

By David Gould, Content Editor           

‘Tis the season to think about gift cards, their benefits as well as their drawbacks.

Just over half of all U.S. citizens have a gift card they haven’t used, according to the research firm Bankrate. Its report found that a typical American has $116 worth of unredeemed gift cards.  Expiration will erase some of that dollar value, so will misplacement of a physical card, or the slow leak caused by recurring fees.

Meanwhile businesses that issue gift cards can face accounting hassles, given that a sold card goes on the books (for those who use the accrual—not cash—accounting method) as a liability. It can’t be counted under business revenue until the purchaser shows up and “spends” the money represented by that card.

One other potential negative involves the length of time it takes for that consumer to indeed show up. The general expectation is that a recipient will spend their card within a few months—perhaps six months at the outside. Thankfully, according to one survey, this indeed happens more than 70 percent of the time. Only 10 U.S. states require vendors / retailers to honor long-dormant gift cards, and the dollar minimums those states impose are small—just a few dollars on average.

All of these little failures and annoyances only matter to a Proponent Group member if they actually crop up in his or her coaching operation. A recent member-only questionnaire we circulated showed Proponent members sailing along generally free of gift-card headaches.

Our survey asked, “Which of the following responses best describes your dealings with gift card / gift certificate refunds?” The first response option was “I very rarely or never get asked for refunds from people holding my gift cards and gift certificates,” and no less than 93 percent checked this box. Of the two remaining responses, one stated that “refund requests are common enough and problematic enough that they discourage me from selling gift cards,” and only two survey-takers checked that option.

To check how long any sort of prepayment credit remains valid with coaches, our survey asked, “When someone prepays through purchase of a gift card or with cash, a check or a credit card, which of the following best describes your stated expiration policy?Exactly half the respondents gave “12 months after purchase” as their nominal expiration time, two percent gave “2 years” and 14 percent gave “six months.” A significant share, 34 percent, said they “do not put an expiration time on any prepaid instruction.”

And how does that work out? Proponent members deal with golfers who exceed stated time limits as follows: “I put them in my book as usual, with no mention of time limitations or expirations” is the answer 41 percent selected. “I usually oblige them, but I let them know the credit is technically expired,” is the response 46 percent chose. The remaining 13 percent give themselves the right to refuse to honor expired cards.

One survey question addressed the internal accounting issue: “Do you use an accounting platform such as Shopify or Square that is able to separate out gift card transactions and track their status (which allows them to be counted on your Liabilities ledger until they are redeemed)?” About two-thirds (64 percent) said no while 36 percent said they did use such a platform.

Anecdotally, we hear lots of positive comments from members about selling instruction via gift card transactions. As mentioned, the golf coach is more used to prepayment—in the form of lesson “packs”—than many, or even most, other vendors. Furthermore, it’s been proven that most golfers interested in working with a teacher never pull the trigger because they don’t know who to go to and don’t know what kind of help to ask for. Receiving a gift card sweeps those impediments out of the golfer’s way. 

It was interesting to see in our survey results that 66 percent of Proponent members sell old-style paper gift certificates. We further learned that, by a notable margin, our members prefer selling digital-only gift units, bypassing the problem of the physical card that goes missing. So, a mix of old-school and new-era when it comes to formats.

One Proponent member, Orlando-based John Hughes, offered some useful comments along with his survey responses. In particular he pointed out that instruction “credits” received by a golfer as a result of a coach’s charitable donation can and rightly should be subject to fairly strict usage requirements. “When giving to charities,” says Hughes, “I always have an expiration date to limit my exposure to being forced to serve someone at a peak time. There’s a difference between honoring something that was paid for versus honoring something you issue free of charge.”

The verdict from this quick research project is clear: Selling gift cards and dealing with prepayment generally is a big positive for Proponent members. That being said, we’re inclined to conclude here by citing what our final question turned up.

That question was, “Do you actively promote and sell gift cards during the holiday season? The percentage of survey-takers saying “no” came out at 38 percent,—higher than logic would seem to dictate. To all those no-sayers, as we look ahead to Mother’s Day, Father’s Day and the year-end holidays of 2023, we take the liberty of encouraging you to go with gift cards and see where they take you.