Gift Card Concerns for Small Businesses

Gift cards have become very popular with customers and a successful retailer’s marketing tool.   Point of sales accounting systems, such as the QuickBooks Point of Sales software, make offering gift cards easy for small retailers.  (Gift certificates are included in the use of the term gift cards.)

After the gift card sale, small companies (as well as large companies) need to be concerned with correct accounting and that federal and state regulations are complied with.  Both of these concerns, accounting and compliance, can be easier dealt with successfully by using information found by searching the Internet.

Below are identified some websites that are good sources of information for addressing concerns that small company retailers might have with gift cards.

In 2009, the US Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act (the CARD Act).  A section of this act deals with gift cards.  A Federal Reserve Board (FRB) site provides an overview of how this act applies to gift cards.  Click here go to this FRB site.  Gift card rules in this act do affect how retailers account for gift cards.  For example, a gift card must be good for at least five years from the date of purchase.

In addition to this federal act, states may have rules that are applicable to gift cards.   Rules are usually associated with the states’ unclaimed property procedures.  Gift cards that are not used (redeemed) can represent unclaimed property to the issuing retailer.  Mary Bernard has written a short overview of aspects of unclaimed property laws affecting gift cards.  Click here to read this overview.  Small companies should read their state’s web pages dealing with unclaimed property procedures and how gift cards might be affected.  Searching on the terms unclaimed property and adding your state’s name should bring up a link to your state’s webpage dealing with unclaimed property, from which information on gift cards (certificates) might be found.

Three review articles dealing with gift card issues, including compliance with unclaimed property rules, are excellent sources of information.  The accounting firm Grant Thornton has an article on opportunities and issues for retailers in their use of gift cards.  One section deals with accounting for gift cards.  Click here to read this article (PDF file).  Another article, written by John A. Biek at CCH, delves into tax issues and unclaimed property aspects of gift cards.  Click here to read this article ((PDF file).  The third article, by Michelle Andre at KPMG, focuses on the issues of gift cards with respect to unclaimed property compliance.  Click here to read this article (PDF file).

Data Mining in a Small Company

Company data are some of the company’s most valuable assets.  Such data as customer and vendor lists and financial transactions are collected routinely and are critical to a company’s operations.  The data is used to show how the company is performing financially and in other important ways.  Company changes are based on decisions driven by what the data shows.

A key to company success is making changes based on what the data shows.  A primary responsibility of the company accountant is to analyze financial data for conclusions about needed changes.  Others in the company depend on company data to complete their tasks and to make decisions.

For these and other reasons, the company’s data is one of its most valuable assets.  The company would be wise to improve the use of this asset by thinking about new ways of using the data it collects and of looking for what may be in the data that provide important decision-making insights, but which has gone and can easily go unnoticed.

Data mining is a method of looking for what may be in the company data that provide important decision-making insights but which has gone and can easily go unnoticed.  Two websites provide good overviews of data mining.   At a Federal Reserve Bank of Boston site, Miriam Wasserman has an article giving examples of data mining use.  The Center for Data Insight at Northern Arizona University has an article entitled “A Perspective on Data Mining” that delves deeper into what data mining is and its use.  Both of these articles are dated but still provide some basics of data mining that continue to be true.  Click here and here (PDF file) to go to these articles.

Although data mining can involve a lot of resources in large companies, Microsoft has developed add-in technology for use with Excel that should make data mining more simple and double for a smaller company.  You can read more about the Microsoft’s data mining product by clicking here.  From this site, you can watch videos on the use of Excel and the data mining add-in.  Whitepapers are also available from this site on Excel and data mining.  YouTube has several videos on using Excel for data mining.  Search on “Excel data mining” at YouTube.

Even with the data mining add-in and it use with Excel, technical challenges requiring sufficient background and perhaps a steep learning curve can still exist.  In such a case, the small company might consider seeking an independent contractor to assist developing Excel for mining of the company’s data and to show unexpected and useful patterns for decision-making.

Risk Management (Online Purchasing as an Example)

A company should be concern with the risks that threatens the company.   Some of these risks occur when a company uses the Internet for purchases.   Although often these risks are small for most purchases, important risks can exist.

The practice of risk management is evolving into a more recognized, systematic (methodical) task within a company.  In a smaller company, the accountant might be the best (only) person to take on this task.  This is a task where a proactive, innovative accountant might add additional value and be recognized for it.

A good approach, it seems to me, to the task of risk management, such that the management is successful, is to recognize where risks exist, to understand the nature of these risks, and then to implement the policies and actions based on this understanding, which minimize the risks.  This approach can benefit from an expert, thorough research of the Internet to find appropriate information to better understand the risks.  This research often leads to recommendations on policies and actions to minimize the risks.

 Provided below are 3 websites that provide excellent information on the risks associated with online purchasing and steps to take to minimize the risks.

A site maintained by the non-profit Privacy Rights Clearinghouse has a list of precautions when purchasing online.  Click here to go to this site and these precautions.

The Bureau of Consumer Protection at the US Federal Trade Commission has a website with information to protect purchasers.  Click here to go to this website and then click “Computers & the Internet” for protections related to online shopping.

The Department of Homeland Security has a site that provides guidance and risks about Internet purchasing from other countries.  Click here to go to this site.

Understanding the information at these three websites is a good approach to implementing policies and actions in your company that will reduce risks related to online purchases.  Identifying these websites demonstrates the value of competent Internet researching in risk management.

Human Resource Management Information Sources

The small company accountant often ends up keeping the “official personnel folders” for the company employees.  And, along with this, comes many tasks that would be done by a human resource department, if one existed in the company.  But, since the company has no human resource department, the accountant is given the role.

Many of the tasks needed, such as payroll, records management, and regulatory compliance, can be well-handled by a skilled and willing accountant.   The accountant can be greatly assisted in this role by a willingness to seek out and use the many websites that have excellent information on the human resource functions and managing the functions.

The following identify some of these excellent sites and provides links to them.

A Wolters Kluwer site provides well-organized and easy to read information covering many functions that are needed in managing personnel.  Click here to go to this site.

The US Department of Labor (DOL) provides extensive information of probable use in personnel management issues and decisions.  Employment law and regulations can be found by clicking here.  DOL provides hundreds of job descriptions and 2010 median pay based on federal government surveys.  Click here to access this information.

Two sites useful for employee benefit-related information are the Employee Benefit Research Institute (EBRI) site and the BenefitsLink.com site.  At the BenefitsLink site, click on “Authorities” in order to find several links to government and other sites providing guidance on employee benefits.  Click here and here to go to the EBRI and BenefitsLink sites, respectively.

These are just a few of the many websites where you can find in-depth information on human resource/personnel management.

Although many human resource tasks can be carried out by the accountant, the accountant and other company leaders need to recognize those situations where the company should seek the advice of more skillful and knowledgeable persons, such as an employment attorney.