Vouchers issuers: pay attention to these 7 points

They are currently experiencing a true renaissance: vouchers. Countless offers were launched during the COVID-enforced lockdowns, including the Hospitality sector. The idea behind the sale of vouchers is tempting: customers show solidarity with their favorite places by buying vouchers for future consumption during the lockdown. But beware: there are a few things to consider in connection with vouchers so that they do not come back to haunt you later.

Below we answer the seven most important questions related to vouchers.

What is a voucher in the legal sense?

A voucher is a document whose holder is entitled to a service by the issuer. From a legal point of view, the papers have a similar character to, for example, a mountain railway ticket or a train ticket – I buy myself a right to a future service, which I can claim upon presentation of the corresponding paper.

There are basically two types of vouchers, namely Value vouchers and Goods vouchers.

Value vouchers have the character of cash, whereby it is clearly defined where (locally) this can be redeemed. The most common type are gift vouchers, where money is actually exchanged for a voucher.

However, discount vouchers also fall into the category of value vouchers (e.g. 10% off the next purchase or a 5 cent discount per liter of petrol on the next tank fill-up).

Goods voucher, on the other hand, entitles the customer to certain goods or services, such as a free sausage at the grill, or a head massage at the next visit to the hairdresser.

Goods and discount vouchers are usually offers with a very limited time limit, so we will limit ourselves to value vouchers below.

How do you issue a (physical) voucher?

The easiest way for smaller shops is to issue the vouchers themselves (physically). On the one hand, there are special software solutions for this (especially useful if you also want to sell the vouchers online), smaller shops can of course also create them manually. You should pay attention to the following points:

  • Prepare the vouchers; either as a file to which all sales employees have access. If necessary, they can print out the voucher and adapt it accordingly. A second option is to pre-print a certain number of vouchers and keep them at the point of sale.
  • Write on the voucher that it is only valid with a signature and only sign it when you have received the money for it and the vouchers have actually gone over the counter. This is how you prevent possible misuse and theft.
  • Establish a minimum of processes internally. For example, determine which employees are allowed to sign the issued vouchers and how these are mapped internally, so that you always know which vouchers are in circulation and for what amount.
  • As an additional identification feature, it is advisable to provide each voucher with a unique identification number.
  • Many businesses will keep these numbers on a spreadsheet, and make a note of which voucher number was sold for what amount and for how long the vouchers issued are valid. This ensures that you always have an overview.
  • Write the issue date on the voucher and set an expiration date.

There are also numerous online services that look after the entire voucher administration process, and may also provide a entire administration and also have a marketing function, such as hamsterli.ch , Poinz or solidarguthaben.ch.

Exchange, cash payment, cumulation and return – what do I have to pay attention to?

Value vouchers have cash character at the shop in which they can be redeemed. A cash payment or settlement of any difference is expressly not intended. It gets tricky when taking over existing businesses: if these are taken over including debts and assets (i.e. if the company is actually taken over or changes hands), the vouchers issued by the predecessor must continue to be accepted. The situation is different if, for example, a restaurant is reopened under a new owner – then vouchers from the old company or managing director no longer have to be accepted.

It is a popular practice in Switzerland to issue vouchers with the note “cannot be combined”. In this context, non-cumulative means that different discount vouchers cannot be combined with one another and only one voucher can be redeemed per purchase. This makes sense especially if you have different discount campaigns running, for example with 10% and another with 20% vouchers – if you issue the vouchers without such a disclaimer, you run the risk of customers being entitled to a 30% discount.

A refund or cash payment is not usually provided for vouchers. To ensure that this is also clear and unambiguous, it is advisable to record this point in the general terms and conditions, and to note “no cash payment” on the voucher. It is common practice to deduct purchases made from the balance. This gives the voucher holders the opportunity to use the voucher again later (and you increase customer frequency accordingly).

Does VAT apply to the vouchers?

Vouchers are considered a means of payment. No service is provided when vouchers are issued, which means that no VAT is charged. This is only due when a voucher is redeemed.

Source: https://www.gate.estv.admin.ch/mwst-webpublikationen/public/pages/taxInfos/tableOfContent.xhtml?publicationId=1007607&lang=de

How are vouchers correctly recorded in accounting?

In the example below, a bookstore sells a voucher worth CHF 50.00.

When redeeming, a book is purchased for CHF 80.00, the difference is paid in cash. In order to keep the example simple, the value added tax that may be incurred in this business case is not taken into account. We assume that the business has an annual turnover of less than CHF 100,000 and is therefore not subject to VAT.

Posting of vouchers. Table: TRESIO

Source: https://www.gate.estv.admin.ch/mwst-webpublikationen/public/pages/sectorInfos/cipherDisplay.xhtml?publicationId=1004106&componentId=1004238&&winid=435398

What impact do vouchers have on my cash flow?

As we saw when booking, a cash flow event occurs when a voucher is sold, which means that we have more money in the cash register in the evening, although no service has yet been rendered at this point in time. If you don’t really pay attention to the bookkeeping, this can become a bit tricky because we then have this money in the till without the amount appearing in the income statement. That means we feel temporarily richer than we actually are. If we issue a lot of vouchers over a short period of time and on a large scale, for example during the Christmas period or the business closure due to the COVID lockdowns, we should always keep this fact in mind: the money we collect belongs to us (and we can use it immediately spend again), however, on the liabilities side of the balance sheet we have entered a liability in terms of future service provision. And we will have to pay that debt at some point without seeing any money again at that point in time.

Tip: TRESIO can help you visualize the effects of such business cases. Free test now.

How long are vouchers valid for?

The terms of vouchers are not clearly regulated in the law. This means that you can basically determine for yourself how long your vouchers are valid. Common practice is to set terms of 5-10 years, whereby 10 years is a rather long period (precisely because you then have to keep in mind the whole time that someone else will come along with a voucher).

Listing the expiry periods in the general terms and conditions, without additionally stating them on the vouchers themselves, is not valid as it is considered misleading.

If nothing is noted on the voucher, the Swiss Code of Obligations 127 and 128 apply: a 5-year limitation period applies to smaller amounts such as as restaurant meals, or books, and 10 years for larger amounts such as flights and hotel accommodation.

There is some good news for everyone who issues vouchers: You can assume that a double-digit percentage of all vouchers issued will never be redeemed – either because the recipients are not interested in it or because they simply forget that they still have an unused voucher.