Years ago, WingCash LLC noticed an interesting problem that many vendors face. Let’s say you own a business, the business is a member of a chain, and you want to sell gift cards. You want other members of the chain to accept your gift cards, but as soon as they do, an accounting problem will happen. When people buy a gift card at a different location and redeem the card at your location, you need to ask the other location for most of the money they received at the original gift card sale.
This problem is complicated. By US law, most gift cards can not expire, so it’s quite possible that the original gift card purchase happened months or even years ago. What if the other location already spent the money? Also, the customer might spend only a portion of the value each time they use the card, so the money may need to go to several locations. Furthermore, printing the cards costs money and customers probably don’t use gift cards enough to compensate the staff for the extra time they have to spend on accounting.
Many businesses see all these problems and decide to simply not compensate each other for gift card purchases. They hope for approximate parity, but such a policy is especially unfair to the locations that tend to redeem more gift cards than they sell. Others avoid gift cards altogether, even though gift cards are good for marketing.
WingCash worked on this problem and eventually came to an elegant solution. Using WingCash, businesses can set up a distribution table that specifies who receives the open loop cash behind the scenes when gift cards (which we often refer to as gift cash) are redeemed. To access the distribution table, create an offer, then visit the distribution tab. The tab lets you configure exactly how much money everyone should receive at both purchase and redemption of gift cash provided by that offer.
Some of the recipients in the distribution table are dynamic. You can assign how much the “redemption location” will receive; the redemption location is determined at the time of gift cash redemption. The distribution feature distributes open loop cash proportionally to the amount redeemed. The transfer history reveals every choice made by the distribution algorithm, and the WingCash reports provide a very clear accounting of compensation for gift card redemption activity.
The distribution feature is immediate once the open loop cash has been provided to WingCash, but sometimes distribution has to wait for payment card settlement. WingCash also has features for settling card payments. Once the card settlement completes, distribution proceeds automatically.
The implementation of the distribution feature is fairly complex, especially since it often has to split notes and is aware of multiple currencies. (Yes, you can pay for an offer in USD and receive MXN gift cash!) However, the test coverage is good and we’ve seen it work perfectly in practice for years now. And it’s all free, open source software.