Let’s say that for a given month, you have sold 100 gift cards, each valued at $100.00.
During the same month, let’s say that roughly 70 % of those gift card values have been redeemed, and let’s assume that they were redeemed at 20 community businesses/locations.
(Note: the information below is a representative example only – there are no commitments implied with respect to redemption percentages, nor to merchant account charges)
Revenues: 100 (gift cards) X $100.00, equals $10,000.00
Payment Gateway charges: $15.00 monthly, and $0.15 per transaction
- $15.00 flat fee for the month
- $0.15 X 100 transactions, equals $15.00 in transaction fees
Merchant Account charges: this will depend on your merchant account, but is usually based on a percentage of the actual amounts. Let’s assume 3 % to be conservative.
- 3.00 % of $10,000.00, equals $300.00
System Fees: $1.00 per location monthly, and 1.00 % per transaction. Let’s assume that in your total “network” / community, there are 50 locations.
- $1.00 X 50 locations, equals $50.00 in location charges
- 1.00 % of $10,000.00, equals $100.00
The following month, you need to reimburse the 20 locations where the gift cards were redeemed.
Disbursement Fees: $15.00 monthly, and $0.25 per EFT/ACH transaction
- $15.00 flat fee for the month
- $0.25 X 20 EFT/ACH transactions, equals $5.00 in EFT/ACH transaction fees
- $7000.00 in disbursements
So, for the month in question:
- REVENUES: $10,000.00
- Disbursements: $7000.00 in disbursements
- Total Charges: $500.00 (effective rate of about 5 % of your revenues for all your payment and disbursement processing and system fees)
- PROFIT: $2500.00 for the month