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Money Movement Fundamentals

What if a guest buys a gift card in one store, but uses it to pay in another? How is money transferred between stores so everyone gets the correct amount? This article explains how money movement solves this problem.

Updated over 2 months ago

Overview

What is money movement? At its simplest, it's a transfer of stored value liability (sometimes called gift card liability) from one location to another. It's best explained by example. Let's say your brand has 12 locations. Location 1 sells a $50 gift card to a guest. On a later date, the guest uses that gift card as payment at Location 6, using $36.18 of the gift card balance to pay (remaining gift card balance = $13.82). How does each location get paid? How does the money flow? That process is what money movement is all about.

Before You Start

  • Generally speaking, franchisees will have access to reports/information about their own location(s) only; corporate users will have access to see money movement activity for all locations.
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  • Money movement refers solely to gift card transactions. It has nothing to do with debit/credit card transactions. If you are having issues with debit/card transactions, you will need to contact your payment processing provider(s), or someone in your finance department.
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  • If you have questions after reading this article, please reach out to us at [email protected].

Money Movement Models

We offer two models of money movement: centralized, or decentralized. If you are not sure which model your organization uses, please contact your corporate office. Each model has advantages and disadvantages (explained below).
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Centralized Model

In a centralized model, all money from gift card sales (new cards, and value added to cards) is deposited in a central, corporately-held bank account. When a gift card is redeemed, money is transferred to the location (or franchisee) where the gift card was used as payment. The actual transfer of the money, either into the corporate account (when a gift card is sold), or out of the corporate bank account and into the franchisee bank account (when a gift card is used as payment) isn't instant. Typically, the transfers happen once per month; exact timing will vary based on your organization.
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Advantages

  • Money is held in a central account, there is little/no risk of franchisees not being paid for gift cards redeemed at their location(s)

  • Individual franchisees don't hold liability on a per-store basis

  • Tracking is more efficient; each store doesn't have to do its own monthly accounting/reconciling

  • Because it's more efficient, requiring less manual labor, it's also likely to be more accurate than relying on monthly accounting/reconciling from each store

  • If a franchisee closes a location (leaves), there is minimal impact if they have a significant outstanding gift card balance

Disadvantages

  • In centralized money movement, there is often a one month delay; gift card balances redeemed at the end of one month may not be transferred until the next month, when reporting is complete. Franchisees may find this frustrating.

  • Franchisees, not corporate, earn interest on outstanding (not yet redeemed) gift card balances

  • Corporate carries all gift card liability

Decentralized

In a decentralized model, money from gift card sales is held in multiple accounts. When a franchisee sells a gift card, the money is deposited in their own bank account. Each franchisee holds the full balance of all gift cards sold. When a guest uses a gift card as payment, money will need to be transferred from the franchisee who initially sold the gift card, to the franchisee where the guest used the gift card. The actual transfer of the money, between franchisees typically happens once per month; exact timing will vary based on your organization.

Advantages

  • Franchisees can earn interest on outstanding (not yet redeemed) gift card balances sold at their locations until the gift card balance is used as payment

  • In centralized money movement, there is often a one month delay; gift card balances used at the end of one month may not be transferred until the next month, when reporting is complete. In a decentralized model, there's the potential to distribute money more quickly

  • Corporate doesn't carry all gift card liability

Disadvantages

  • Franchisees assume the risk of other franchisees not having enough funds to pay for redeemed gift cards. If a franchisee goes out of business, closing their bank account, that means when cards they previously sold are redeemed at other locations, the other franchisees will likely not receive money for those transactions (because there's no money/bank account to send the money). For example, in a normal situation, if Franchisee A sells a gift card (takes in money), and then a guest uses the gift card as payment at Franchisee B, Franchisee A transfers (in the amount redeemed) to Franchisee B. But if Franchisee A goes out of business, then when the gift card is used at Franchisee B, there won't be any money that can be withdrawn from Franchisee A’s bank account. Franchisee A cannot pay Franchisee B; Franchisee B will be out the money.

  • It can be frustrating to franchisees if they lose too much money

  • Reporting can be complex, and time-consuming since each store will need to do its own reporting/reconciling

Money Movement Reporting Tools

There are reports for Corporate users, and individual stores/franchisees.
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Reports for Corporate

Stored Value Reconciliation Summary

Stored Value Reconciliation Detail
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If a franchisee calls corporate, to ask "why didn't I get paid?" or has questions about payment discrepancies, here are some common causes for missing/different payments:

  • Money movement hasn't run yet. Money movement runs on a schedule, and the franchisee may be asking too soon in the cycle

  • If your organization uses the decentralized model, it's possible that a location closed with no money in its account to fund transactions

  • If your organization uses the decentralized model, it's possible that no cross-store transactions occurred (all gift card purchases were made with cards originally purchased in the store of the current transactions)

  • Check the ACH and banking account information we have on file; you may need to update your information with us

  • If none of the above apply, email [email protected] and we'll do our best to help you figure it out

Reports for Stores/Franchisees

Stored Value Money Movement by Store Summary

Stored Value Money Movement by Store Detail

Stored Value Money Movement ACH by Store Summary

Stored Value Money Movement ACH by Account
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The first two reports show money movement transactions; the second two reports include information on the bank accounts used, and amounts moved.
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Franchisee Money Movement Report- shows detailed information for all debits and credits, in and out of a franchisee's account via ACH
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For further assistance, please contact your solutions consultant or customer success manager, or email [email protected].

Related Articles
Stored Value Money Movement by Store Summary
Stored Value Money Movement ACH by Store Summary
How is Money Movement Handled When a Store Changes Ownership?
Stored Value Money Movement ACH by Account
Stored Value Money Movement by Store Detail
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