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A Note on How RICS Gift Card Transactions are Reconciled (as of February 2021)
A Note on How RICS Gift Card Transactions are Reconciled (as of February 2021)

RICS Best Practices Have Changed... And It's Confusing.

A Running Enthusiast avatar
Written by A Running Enthusiast
Updated over a week ago

Prior to February 2021, we followed the RICS best practice guidance surrounding orders submitted with a gift card via their API. This best practice consisted of all gift cards applied as a "coupon", deducting from the total sale. This is the only option via their Order Submission API (a gift card field isn't present for us to use). This often resulted in reporting inconsistencies, since these transactions were viewed as a discount by RICS.

After receiving feedback from RICS-based stores inquiring about the possibility of a reconciliation method that more closely mirrored RICS's gift card credit redemption model of in-store purchases (where the gift card is credited at creation, then profit is shown at redemption), we engaged with RICS to find a better solution.

The result, and new best practice guidance from RICS, is two-fold.

First, we now submit the gift card totals with the order transaction, then, via a separate API process, remove the spent value from the gift card in RICS. The end result, where gift card transactions are included, shows the full order total in RICS, not a discounted amount. Your payment gateway will accurately charge the cash value for the transaction minus the gift card, and the gift card value will be reduced in the background as it should.

However, while this new reconciliation process more accurately reflects accounting best practices defined by RICS, and thus the order totals for the day, there is a confusing caveat to be aware of.

RICS' API (the mechanism our platform uses to process transactions and orders) only allows for one "tender" type to be submitted as part of an order. As such, in RICS reporting, the gift card amount will not be broken out in the report, and the full tender amount will be under a single category based on how your system is setup (e.g. "External Payment" or "Mastercard").

For example:

  1. Sally purchases a $100 gift card to your store on 12/1/2020

  2. Sally visits your online store on 1/15/2021 and adds $200 worth of merchandise to her virtual shopping cart.

  3. Sally redeems the entirety of her $100 gift card in this online shopping cart

  4. Sally is charged $5 for tax/shipping, and the total charged to her credit card by your payment gateway is $105 ($200 - $100 +$5)

  5. Sally's invoice (created by Run Free Project and emailed to her) will reflect a total charge of $105, with her gift card purchase appearing as its own separate line item

  6. However, the corresponding order in RICS will reflect a total charge of $205. The charges and reporting in RICS associated with that order will also reflect a total charge of $205 as well.

  7. In RICS, the gift card associated with Sally's purchase from 12/1/2020 will reflect the proper balance ($0 in this case) and will have been applied to the sale in the proper way, even though the sale record RICS does not appear to reflect it.

  8. Run Free Project injects "Gift Card Purchase", card number, and amount into the comments section of the order we submit into RICS for tracking purposes, but at this time, we are constrained from separating multiple charges from a single order into multiple tender types, which is why the reporting looks "weird".

Rest assured, this process is following best practices and your sales, gift card redemptions, and totals are being properly accounted for, even though the reporting information is confusing.

When RICS gives us the ability to apply multiple tender types to an order through their API, we will adjust our submission process to separate gift card transactions as their own tender type, which will correct RICS's reporting issue.

At this point, we have no way around this. Until RICS updates their API, this is the best we can do while still following best practices.

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