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Any suggestions on how to treat Costco Rewards?

THEmikehd

This question applies to all types of store credit refunds I would suspect. We get our yearly Costco Rewards check, which is only redeemable in store against purchases, we merrily spend it plus a bit more of course, but now comes the time to document the transaction in the register.

Say the total is $400, and consists of more than one spending category, and the Reward is $200. I want to accurately track the spending actually done and account for the Reward as well.

Any ideas would be welcome.

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Accepted answers

UKR

Take the money and run … to Costco. 😉
Next time you make a purchase and cash the rewards coupon, allocate the coupon amount to an "Other Income" category, e.g.,

This year, because I got more cash back for the coupon than I purchased, $2.83, the above is recorded as a deposit in my $-Cash account register.

All comments

UKR

Take the money and run … to Costco. 😉
Next time you make a purchase and cash the rewards coupon, allocate the coupon amount to an "Other Income" category, e.g.,

This year, because I got more cash back for the coupon than I purchased, $2.83, the above is recorded as a deposit in my $-Cash account register.

With the Costco reward, I wait until it is time for my membership dues and I use it to pay for that. So my membership fee, instead of $130, becomes $30 for example. With credit card cash rewards, I created a non-taxable income category called "Cash Back Reward" where I apply the reward to my statement and when it is downloaded I categorize it as that.

Palace

As for me, I always put the Credit Card Rewards (or a significant portion of) into my Saving Accounts (I have several) or Add On CD accounts. I don't attempt to track C.C. Savings Rewards in a separate category as you wish to do, if I understand correctly. I guess you could create a separate savings or checking account specifically for C.C. Rewards, labeling it as such; then when the total is high enough, begin spending from those accounts. Then label the items you buy as money from C.C. Rewards as a Category or Tag; or label it as such in the memo field in ledger?

NotACPA

Since the Costco Rewards can only be spent at Costco, I'd post it into my "Receivables" account and use that Receivables account as part of a split transaction with my next purchase.

THEmikehd

Thanks for all the suggestions. I was able to use the method described by @UKR to achieve my goal of having accurate reporting the expenses as well as capturing the reward income (I just used Misc Income with a tag for Costco).

MMinderbinder

I think the best suggestion of the group is to use an asset account recorded to an expense category (not income - a rebate of expenses already paid).

When you receive the Costco reward (assume 30):

Account/Category	Comment/Payee	Amount
Asset Account	Payee Costco	30
Expense category of Rebates	Record Costco reward received	(30)

Then when you use the Costco reward at Costco, use a split transaction to offset the asset account. For example, spend 55 on bananas and use your 30 Costco reward and pay the remainder with your Costco credit card:

Account/Category	Comment/Payee	Amount
Costco Credit Card	Payee Costco	25
Asset account	Comment Use Costco reward	(30)
Grocery (category)	Comment Bananas	55

Valderi

For me, I've created cash accounts for each card. I keep them separately. I don't use them in my budget, only to see how much I have in each. From time to time, I update the sales.