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Gift Vouchers that really work

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beng27 View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote beng27 Quote  Post ReplyReply Direct Link To This Post Posted: 23 September 2013 at 1:32pm
I'll second that - can we have some feedback on your thoughts please? Last time this thread was active, pretty much the same thing happened - we spent ages explaining what a gift voucher was, then all went quiet and nothing happened . . .

thanks!

The Best Vegetables for the Kitchen Garden
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Red Quote  Post ReplyReply Direct Link To This Post Posted: 20 September 2013 at 5:32pm
Support
can we have an update from you on this as it is something a lot of us would like to be able to use and as I said it would help to be able to offer a gift voucher in time for Christmas.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rscass Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 10:28pm
The above is the correct way to apply a pre-paid gift voucher in the UK.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote beng27 Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 10:10pm
No. I think the VAT is a red herring!

Look here's your basket:

Gross goods +shipping 100.
VAT 20.

Basket total 120 all in.

Customer enters voucher code: - 80

Total to pay 40

Pays 40 by card/paypal/whatever

gets receipt from merchant showing all the above:

GOODS & SHIPPING 100
VAT 20
TOTAL PAID 120

All is OK, what is the problem?



Edited by beng27 - 17 September 2013 at 10:11pm
The Best Vegetables for the Kitchen Garden
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rscass View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rscass Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 10:03pm
It only goes pear-shaped if you sell the VAT-less 20.00 gift voucher for 15.00!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rscass Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 10:00pm
Hi Andy,

There is a tax issue because the goods are not just being discounted.

If you apply a 20% discount to a 100 sale, then the VAT is worked out on a gross value of 80.

If the same 100 item was paid for with 80 paypal and 20 gift voucher, the VAT element is based on 100 not 80, a difference of 3.33.

Richard.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote beng27 Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 10:00pm
Thanks very much for explaining. It is really helpful to be able to have a dialogue about this.

I think many of the problems might be because you are still thinking of this as a promotional coupon type of thing, not a voucher.

So, just to explain:

Customer Fred buys a gift voucher code for 55 and sends it to their friend Harry

Harry makes a cart of goods.

The total inc shipping and tax will be either:
A) less than the value of their voucher
B) exactly the value of their voucher
C) more than the value of their voucher

In both case A and B, then Harry is not billed anything, The total owing is 0. So they do not pass to any payment processor be it PayPal or anyone else. (Tax and shipping calculations are exactly as normal for that basket.)

In case A, there is spare value in the voucher, but this is discarded. Harry loses any unspent voucher. It would be nice to point this out by pop-up, but this keeps it all simple - avoids all sorts of grief for RC and the merchant in tracking part-vouchers. There are no (sales) tax issues on the discarded part as it has not been spent. The merchant will pay corporation tax on it as it is a profit, but that is not RCs problem. There are no issues with payment gateways as no payment is made or processed.

In case C, then Harry is billed for the difference between the TOTAL value of the basket (inc tax and shipping) and the voucher. He can pay this extra by any active payment method, just like always.

Now this last bit is the bit you say is a problem with PayPal specifically. But I genuinely don't understand how this can be a problem, because this ALREADY happens with the current model - if I issue a voucher for 10 off and someone spends 20 , you bill them for the difference. So how can it work now - but not if you apply the voucher to the total inc shipping and tax?

I still wonder if many of the stumbling blocks are because RC is conceptually thinking of this as a variant of a promotional code or coupon (apply to items), but really its a gift voucher (applies to a cart total).

If you discard any preconceived ideas, and think of how an amazon gift voucher works, it will be clearer what we all would like. (But for simplicity we will discard any unused part of the voucher, as tracking that would be hideous)

thank-you

Ben
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Post Options Post Options   Thanks (0) Thanks(0)   Quote softap Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 9:54pm
I can't see why you think these problems are new, when Romancart has allowed promo codes for years? It already correctly re-apportions the tax if you apply a promo discount code. And surely Paypal just gets sent a total to pay, rather than a list of the line items involved, so why would Paypal be a problem?

The existing promo code discount system works fine - it just needs to be able to work on the whole order total (i.e. including shipping) rather than on the goods-only total.

Best wishes

Andy Rigby
www.christianbits.co.uk

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Post Options Post Options   Thanks (0) Thanks(0)   Quote rscass Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 9:52pm
Hi Support -

There is a guide on HMRC's website for UK businesses.

If you sell a 10.00 gift voucher for 10.00, the voucher is not subject to VAT.

When redeemed, all VAT rates and any shipping with apportioned rates (if say the sale included standard and zero rated goods) are left as is and the voucher is treated as if it were cash being handed over.

The URL is here: http://www.hmrc.gov.uk/vat/managing/charging/discounts-etc.htm

In essence, for VAT purposes, the idea of a gift voucher is straightforward, provided it is sold at face value and not for example sold at a discount.

If added to Romancart, the feature would have to be specific and not just another promo code. Perhaps the ability to apply a tax rate to a gift voucher could be permanently disabled?

Richard.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Support Quote  Post ReplyReply Direct Link To This Post Posted: 17 September 2013 at 9:21pm
Hi,
There's a number of problems which we need to work out.

Firstly we are working on sending the items to PayPal when PayPal is used as a Payment option.
I'm not sure if they would support this, with most carts promotional codes create a negative value line item.

Other problems are things like tax.
If you sell 4 items for 50 each with a different tax rate, then use a 55 voucher. The remainder is 5, but what is the tax on that and what does the 5 left relate to.

If you have examples of what other systems do - showing tax breakdown and how the promotion is applied, please email us the details

It would be great to add it but we need to understand how it should work.

Many Thanks
Support
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