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Part of Cost Paid in Gift Cards? Say what?! - Page 2

post #16 of 45
9/23/11 at 9:47am
Bartering works for some people but not all. I started making the cake shooters. My 1st order was for 2 DZ. IN exchange for 1/2 off one of the DZ the photographer she hired would take pictures so I could start advertising them. Great I thought. Until, the day of the baby shower when the photographer didn't show up. I was out $$$, and the pictures I had planned on using.

I will never barter again or offer discounts, at all, even if it helps me out!
I smile because I don't know what the hell is going on.
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I smile because I don't know what the hell is going on.
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post #17 of 45
9/23/11 at 10:37am
Here is how I see it....

they get to pay less for the cake, write off the gift cards as a business expense thus reducing their taxable profit.

You on the other hand get less for your cake, get gift cards you don't really want as well as as include the taxble portion of the gift cards to your income. huh! As well as fuss each time you have to use those darn cards... I know I will.... icon_smile.gif

keep us posted as to what you decide.
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post #18 of 45
9/23/11 at 10:39am
I have to agree with those that say don't do it. If you do it once... they will assume you will do it again and may start wanting to use gift card trades for every order. If you start off right now saying you can not do to your accounting practices then you are done with it but if you start off accepting it would be hard to use that reasoning later.
My personal experience has not been good either. The guy I pay to mow my grass asked me to make graduation cakes for his son and in exchange was going to do some landscaping.... still waiting on that to get finished and the graduation was in May... what made it more complicated is that he and his wife both work in my building in another department.
Best of luck whatever you decide
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post #19 of 45
9/23/11 at 10:51am
Quote:
Originally Posted by luntus

they get to pay less for the cake, write off the gift cards as a business expense thus reducing their taxable profit.


To be fair, if they pay by cash or check they could still write it off as a business expense. We have customers who pay for their kid's birthday cake with a business check, I assume they plan to write off the cost of the cake.
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Recent Articles: The Magic Pricing Formula • Copyright Law
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post #20 of 45
9/23/11 at 10:58am
good point Jason....they are in a win win position.
another thing I was thinking was .... what if they have a limit on the cards like vouchers have.... so they can say it is each is worth say 25 bucks for a delux clean or whatever and then raise their prices ..... JoanieB will end up having to pay extra for those services.
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post #21 of 45
9/23/11 at 11:02am
It's only a win-win position if the IRS doesn't find out they are deducting personal expenses against their business income. icon_wink.gif
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The Bakery Business Perspective
An experimental blog with new content every Tuesday!

Recent Articles: The Magic Pricing Formula • Copyright Law
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The Bakery Business Perspective
An experimental blog with new content every Tuesday!

Recent Articles: The Magic Pricing Formula • Copyright Law
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post #22 of 45
9/23/11 at 11:07am
a bad idea in this situation, listen to your intuition/gut feeling. I would not accept gift cards from this client.
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post #23 of 45
9/23/11 at 11:10am
Writing off personal expenses against your business is tax fraud.
No license or insurance. Put lead wires in cakes, never wash hands, cake boards are used cardboard. No contracts cause I can't read or write. No lawyer cause I'm judgment proof. I bake with old mix boxes found behind Walmart. Now about my question
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No license or insurance. Put lead wires in cakes, never wash hands, cake boards are used cardboard. No contracts cause I can't read or write. No lawyer cause I'm judgment proof. I bake with old mix boxes found behind Walmart. Now about my question
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post #24 of 45
9/23/11 at 11:13am
This doesn't sound like a good idea to me. If you decide to do the cake, get paid only in money. I'm afraid this is not going to end well.
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post #25 of 45
9/23/11 at 11:36am
I would not be open to accepting their gift cards but if it is a deal breaker and you think you may get more business in the end then okay maybe but just for the SERVICE portion of your cakespences.

The way I reason it out is that they are doing labor (car wash, oil change) in exchange for your labor (decorating, delivery, setup). I would only accept a small percentage of gift card payments (as the first deposit) and would be sure to use them up BEFORE the cake is delivered because anyone who would suggest that trade would be suspect in my opinion. In other words, if they don't like your cake end product, they could deny you the use of the service cards and you would lose out. You have already said that they kinda put off deciding to go with you and you thought that was to price other folks out. Hate to be a suspicious person but that is just how I would feel about it.
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post #26 of 45
9/23/11 at 11:39am
If you do the cake at full price, when guests at the wedding ask, "who made the cake? are they going to tell them someone else? What if the rest of the in-crowd trade business gift cards for their services? I would stay far away from this warped vortex. Money is money and that's what I would expect for my product.
Making life sweet!

Lindas Just Desserts

Inspected and licensed commercial kitchen
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Making life sweet!

Lindas Just Desserts

Inspected and licensed commercial kitchen
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post #27 of 45
9/23/11 at 12:17pm
WOW, just open your purse and take out $$$$ and light a match too it! That pretty much sums it up in my mind. This is not Tit for Tat....... You can rationalize all you want, their business service for your business service, but the bottom line is still the same, it's a their daughter's wedding which is a personal affair. If they choose to pay for the wedding out of their business account that's their private matter, but don't let yourself get dragged into it.........
Major life events require sugar.
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Major life events require sugar.
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post #28 of 45
9/23/11 at 12:44pm
There's really nothing wrong with bartering in general, in fact it can work out in the vendor's favor -- if you are selling a $100 cake to someone who wants to barter with a service that has a 25% markup, you might be able to negotiate to be paid with $110 worth of services, which would cost the customer $88 to provide. Now that's a win-win, provided that you would actually use the service being bartered (which is not the case in this thread).
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Recent Articles: The Magic Pricing Formula • Copyright Law
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The Bakery Business Perspective
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Recent Articles: The Magic Pricing Formula • Copyright Law
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post #29 of 45
9/23/11 at 12:57pm
I think your husband is wrong to tell you that you have to do this cake because these people know a lot of people. What are they the mafia?

There is absolutely no way I'd accept the giftcard arrangement.

My cake business is completely separate from my personal household accounts and my husband keeps his nose out of it. (Except when it's time to pay my quarterly taxes, since he's my accountant lol)


$1500 for that many servings is a good deal. If they can't afford to pay you in full than maybe they should not invite 450 people to their wedding and get a cake they can afford.
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post #30 of 45
9/23/11 at 12:58pm
Quote:
Originally Posted by jason_kraft

There's really nothing wrong with bartering in general, in fact it can work out in the vendor's favor -- if you are selling a $100 cake to someone who wants to barter with a service that has a 25% markup, you might be able to negotiate to be paid with $110 worth of services, which would cost the customer $88 to provide. Now that's a win-win, provided that you would actually use the service being bartered (which is not the case in this thread).



Yes, you'd be correct if it's all on the up and up and everyone is going to come out in total agreement, but the OP is not. I would suggest to the OP to mark her cake up mega watts and then take the gift cards... LOL (just kidding, Jason, little cake humor on Friday afternoon)
Major life events require sugar.
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Major life events require sugar.
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