Gift card liability

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Tom

Tom

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I'm not selling – or buying – but I've seen a number of posts recently that cause me concern about the extent to which taking over an existing B&B carries with it a liability for gift cards.
Even though a "gift certificate" or a group on type voucher may have an expiration date, there are significant federal and state limitations that may keep that liability alive. I haven't looked at group on recently, but I believe that someone is liable for at least the cash amount that was paid for the voucher. As a prospective buyer, I would want to be really careful about what obligations I might be picking up for future free rooms!
 
I would also be concerned if I was buying when an inn showed a higher than avg occupancy rate due to some gimmick like group-not-on or living hermit.
Having rooms filled by group-not-on and getting just 25% of the room rate would be a travesty. I bet buyers would never know this until it was too late.
It's a jungle out there!
 
What bit us in the butt were donated gift certs the PO's handed out. We supposedly got paid for all outstanding GC's that were purchased (not true), but the free ones threw us. They were from the inn, not the PO's, and they pretty much laughed at us when we called them. They suggested we honor them or deal with the fallout.
We are still selling GC's, but we don't give any away any longer.
 
JBloggs said:
I would also be concerned if I was buying when an inn showed a higher than avg occupancy rate due to some gimmick like group-not-on or living hermit.
Having rooms filled by group-not-on and getting just 25% of the room rate would be a travesty. I bet buyers would never know this until it was too late.
It's a jungle out there!.
Click to expand...
people have no fricking idea - we do a gift card scheme called X we get £55 per card but use it as a way to sell a second night and we have a 75% success rate on that, they are trying to get me to do 2 nights at £65 - said you are having a laugh I normally sell 1 night for that! whole purpose is to sell the second night at full price so doing a 2 night won't work! but then have guests that complain well no where will take my 2 night ones (no wonder they have been pushing me hard) told them why. Also company is all oh well only take them off season, midd week or whatever - so how do I explain that to the guest? No I don't think so
 
Morticia said:
What bit us in the butt were donated gift certs the PO's handed out. We supposedly got paid for all outstanding GC's that were purchased (not true), but the free ones threw us. They were from the inn, not the PO's, and they pretty much laughed at us when we called them. They suggested we honor them or deal with the fallout.
We are still selling GC's, but we don't give any away any longer..
Click to expand...
Morticia said:
What bit us in the butt were donated gift certs the PO's handed out. We supposedly got paid for all outstanding GC's that were purchased (not true), but the free ones threw us. They were from the inn, not the PO's, and they pretty much laughed at us when we called them. They suggested we honor them or deal with the fallout.
We are still selling GC's, but we don't give any away any longer.
Click to expand...
Yes and that is on a much smaller scale than 500 group-not-ons. Imagine it.
I donate GC's to people I know and have on it "As long as we own this B&B" a few here have them in their possession.
We too found outstandings not written down anywhere when we bought the inn. I worked at a place where this GM was going to get fired and he got wind of it and printed them out by the hundreds and gave and sold to everyone he knew. They had to honor them for years. It was in San Diego, that guy was a terd.
 
Jcam said:
JBloggs said:
I would also be concerned if I was buying when an inn showed a higher than avg occupancy rate due to some gimmick like group-not-on or living hermit.
Having rooms filled by group-not-on and getting just 25% of the room rate would be a travesty. I bet buyers would never know this until it was too late.
It's a jungle out there!.
Click to expand...
people have no fricking idea - we do a gift card scheme called X we get £55 per card but use it as a way to sell a second night and we have a 75% success rate on that, they are trying to get me to do 2 nights at £65 - said you are having a laugh I normally sell 1 night for that! whole purpose is to sell the second night at full price so doing a 2 night won't work! but then have guests that complain well no where will take my 2 night ones (no wonder they have been pushing me hard) told them why. Also company is all oh well only take them off season, midd week or whatever - so how do I explain that to the guest? No I don't think so
.
Click to expand...
Jcam said:
people have no fricking idea - we do a gift card scheme called X we get £55 per card but use it as a way to sell a second night and we have a 75% success rate on that, they are trying to get me to do 2 nights at £65 - said you are having a laugh I normally sell 1 night for that! whole purpose is to sell the second night at full price so doing a 2 night won't work! but then have guests that complain well no where will take my 2 night ones (no wonder they have been pushing me hard) told them why. Also company is all oh well only take them off season, midd week or whatever - so how do I explain that to the guest? No I don't think so
Click to expand...
YEP!
 

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