Unused iTunes balances

Doctor Q

Doctor Q

Administrator
Staff member
I have a few dollars in my iTunes Store account, which I haven't gotten around to using yet.

I guess Apple loves it when people buy gift cards and take a long time to give them to people, and when people redeem them but take a long time to spend them. After all, Apple gets to keep the money all that time.

Lots of retail stores play the gift card game, pushing gift cards whenever they can. Some stores even have gift cards with expiration dates, and you simply lose the money if you don't make purchases in time. I'm glad Apple lets you keep a balance in iTunes as long as you like.

I was actually surprised to find that, after a while, Apple sends you an emailed notice about an unused balance. The message says
Did you know that you have credit in your iTunes Store account? To check your balance, please sign in by clicking on the account button in the upper-right corner of the iTunes Store.

Your credit is good toward any song, video, audiobook, or game download in the store. If you need help deciding, our iTunes Essentials, Today's Top Songs, and iTunes main page are great places to start.

If you're having trouble signing into your account, you can reset your password using iForgot, Apple's online password recovery tool. If a technical issue is preventing you from using your store credit, please reply to this email. Our support agents will be happy to assist you.​
I think it's downright neighborly of Apple to do that for its customers, rather than silently keeping the money that some people may have forgotten about or have had trouble using.

Thanks, Apple. Good for you! :)

I'm sure curious to know what the total outstanding balance is across all iTunes accounts. Apple must be earning a lot of interest on all that unused cash!
 
honestly, it makes sense for apple to encourage you to use it.
here's why:

the more items you own from the iTunes store:

the less likely you are going to switch to another store.
the more likely you'll stay hooked on their platform of iTunes/iPod/iTunes Store
which means more money for them.

if its sitting there unused, its not doing anything, its not pushing their platform.
 
PlaceofDis said:
honestly, it makes sense for apple to encourage you to use it.
here's why:

the more items you own from the iTunes store:

the less likely you are going to switch to another store.
the more likely you'll stay hooked on their platform of iTunes/iPod/iTunes Store
which means more money for them.

if its sitting there unused, its not doing anything, its not pushing their platform.
Click to expand...

I agree. It's still different from most places, that play hide the ball.
 
I feel hurt. I've had a balance in my iTMS account for well over a year now without having received any sort of nifty sales email. :p
 
Another interesting tidbit:

For reasons that I don't fully understand, retailers are not allowed to recognize the revenue from gift card sales until the card is redeemed (or expired if that's allowed in the jurisdiction) or the expectation of redemption has passed (whatever that means).

So even though they sold that iTunes gift card to Auntie Mae for $25 in December 2005, if you haven't spent it yet, they have to carry it as a liability on their balance sheet until you do so. Even though they have the full $25, and it doesn't really matter whether you spend it or not.
 
WildCowboy said:
For reasons that I don't fully understand, retailers are not allowed to recognize the revenue from gift card sales until the card is redeemed (or expired if that's allowed in the jurisdiction) or the expectation of redemption has passed (whatever that means).

So even though they sold that iTunes gift card to Auntie Mae for $25 in December 2005, if you haven't spent it yet, they have to carry it as a liability on their balance sheet until you do so. Even though they have the full $25, and it doesn't really matter whether you spend it or not.
Click to expand...
So they have a $25 liability (delivery of the goods you'll eventually buy), but they'll still report and pay tax on the interest they earn on that $25?
 
devilot said:
I feel hurt. I've had a balance in my iTMS account for well over a year now without having received any sort of nifty sales email. :p
Click to expand...

I got a mail today from iTMS US about my balance that's been there for about a year... must be spring cleaning...
 
Doctor Q said:
So they have a $25 liability (delivery of the goods you'll eventually buy), but they'll still report and pay tax on the interest they earn on that $25?
Click to expand...

I assume so, but I'm definitely not an accountant.

However it shakes out, it's a significant paperwork (or computerwork) hassle for companies to deal with all of this, but in the end it's worth it because enough people never redeem the gift cards.
 
Applespider said:
I got a mail today from iTMS US about my balance that's been there for about a year... must be spring cleaning...
Click to expand...
:eek: Gee, I feel lame. I forget that it's tied to an email account I don't normally check. Uh-dur. :eek:
 

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WildCowboy said:
Another interesting tidbit:

For reasons that I don't fully understand, retailers are not allowed to recognize the revenue from gift card sales until the card is redeemed (or expired if that's allowed in the jurisdiction) or the expectation of redemption has passed (whatever that means).

So even though they sold that iTunes gift card to Auntie Mae for $25 in December 2005, if you haven't spent it yet, they have to carry it as a liability on their balance sheet until you do so. Even though they have the full $25, and it doesn't really matter whether you spend it or not.
Click to expand...


Thats because until you spend the money, the have the liability to provide you with a service worth $25, i.e. until you spend it, they have the money but havn't yet given their side of the transaction - thus are liable for it.

Does it make more sense written like that?
 
interpolic said:
Thats because until you spend the money, the have the liability to provide you with a service worth $25, i.e. until you spend it, they have the money but havn't yet given their side of the transaction - thus are liable for it.

Does it make more sense written like that?
Click to expand...

I understand that. It just seems like from an accounting standpoint, it seems like life would be a whole lot simpler if the gift card itself could be counted as their side of the transaction. It could then be exchanged at a later date for songs, but the entire transaction would consist of purchase and delivery of the gift card. But that's clearly not how it works, and it seems to cause a variety of issues in delayed recognition of revenue and questions about when that revenue can be recognized when gift cards are not redeemed.
 
I got that message about unused balance and I was thinking that it was going to be an expiration notice or something, but it was only a reminder, it was a nice surprise!
 
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