Categorizing reward programmes

[Alun Champion]

I do option 2 but on a monthly basis (statement), as my rewards aren't
received until the end of the statement period.
Doing it on a transaction by transaction basis for either option 2 or
option 3 sounds to much like hard work but then I don't have any
single expense cards (e.g. fuel), or any flat % reward cards.

Some rewards I track as a stock (e.g. airmiles), others as cash (e.g.
% cash back). I accept that some expenses may be over stated by a
small amount, and in some cases it maybe not be able to assign a value
to the reward until redeemed (e.g. airmiles), so how can you
accurately track without it becoming arduous.

If I did track it on a transaction by transaction basis then I would
probably do option 3, and just treat it is a transfer from one asset
account to another:
Asset:Bank: -$50.00
Asset:Reward: $1.00
Expense:Fuel: $49.00



On 21 March 2014 16:43, Scott Armitage
<account+gnucash at scott.armitage.name> wrote:
> Hi all,
>
> I would like to solicit some input on the best method(s) to account for
> things such as loyalty rewards programmes. This could e.g. a 2% cash-back
> credit card, or an Air Miles card, or any other such loyalty programme
> where the user is rewarded. I will provide my specific example.
>
> Consider a fuel (gasoline) vendor loyalty card where for every dollar spent
> at that vendor you receive some number of points on your loyalty card. Say
> you get 10 points for every dollar spent; the exact ratios are not
> important. At certain plateaus you can redeem those points for a fuel
> savings reward card. This reward card reduces the cost per litre for
> gasoline by some amount for a certain number of litres. In this example,
> we'll say you can redeem 10,000 points for the reward card which gives you
> a 5 cent/litre cost reduction for 200 litres. This is an intrinsic value of
> $10, which would put to overall return of the loyalty card at 1%.
>
> The question is, when purchasing fuel with this reward card, how do you
> account for the savings? I see a few different methods and am not sure
> which one I like the best.
>
> The first is to simply ignore the points and reward cards entirely, as they
> are never considered cash-in-hand. If you were to run a report, you would
> see your total fuel expenses as paid for by you, but would have no history
> or tracking of what that would have cost you without the loyalty cards.
>
> The second is to treat the fuel savings reward card as "income" in the
> amount of its intrinsic value when points are redeemed to get it. This
> gives you a history of how much you saved using the loyalty cards, because
> an income report would show you your total rewards as a separate income
> account. When using the reward card, those transactions would be entered as
> a total expense for the original amount, with 5c/L coming from the reward
> card account and the rest from your normal payment method. The downside is
> your expense report now shows more than you actually spent on fuel, unless
> you go and explicitly take the income account into account (erm, oops;
> phrasing).
>
> The third method I see is similar to the second method above, except the
> reward card comes out of the fuel expense account instead of the fuel
> reward income account. Now you still have the tracking as before, but your
> fuel expense report shows only the amount that you actually paid for fuel
> over the period of interest. I suppose the downside to this is that the
> purists probably think it is ugly, but I am not sure that outweighs the
> convenience for me.
>
> Suggestions?
> -Scott
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