Hi. I have a small gym that takes card payments. Occasionally I'm asked if I can do 'Cash-back' by giving them cash from the till if they use their debit/credit card. If, for example, someone asks for £20, how do I account for this? My card machine shows a sale of £20 and my till is down by £20 cash. I know that at the end of trading it will still balance (the card receipt simply replaces the cash) but I'm worried the card receipts will look like sales and I'll have to pay VAT etc on it. I use a home-made epos system running on MSAccess and can add buttons etc as I please. Do I need a 'Cash-Back' button on the till and what should it do? (BTW I'm not accounting fluent so please explain in laymen terms). Thanks for any help on this. Dave
I would say yes to having a "cashback" button and keeping the transactions seperate. It is not a sale as such, as you are not gaining or losing money but i would keep them seperate so there is a breakdown of the till takings from sales and cashback transactions.
I have never had any experience in dealing with this situation before but it is how I personally would go about it.
Just a thought - is this legal with a credit card?
The reason I ask is whenever I buy goods out a supermarket with a debit card I am almost always asked if I want cash back. But I NEVER, repeat NEVER, get asked if I want cash back when I pay by credit card.
__________________
Never buy black socks from a normal shop. They shaft you every time.
I think it's legal, but not financially sound. Debit cards tend to have a standard processing fee regardless of amount. So using your card for £5 shopping costs the business the same as £25 (£5 shopping and £20 cash back), but also saves the business on cash handling fees for paying money into the bank.
With a credit card however, you are generally charged a percentage of the sale. My processor charges 2.75%, so for £5 I pay 14p but for the £25 I pay 69p. This is probably a lot more than the cost of paying cash into the bank.
I once got a cashback on a credit card, but I'm sure it was a mistake.
I don't think it's illegal, because you can get cash advances on credit cards from banks, but there's probably not enough in it to make it worthwhile for supermarkets to provide a cash advance service, or maybe they would have to accept too much risk.
Later addition: I didn't see Kris's reply, which I like better than mine.
-- Edited by ilsm on Tuesday 7th of January 2014 11:06:26 AM
