We have discussed this topic several times and without resolution as to how SBUX handles the liability on unredeemed cards.I wrote investor relations and received this reply:>>>Revenues from the Company's stored value cards, such as the StarbucksCard, are recognized when tendered for payment, or upon redemption.Outstanding customer balances are included in "Deferred revenue" on theconsolidated balance sheets. There are no expiration dates on theCompany's stored value cards, and Starbucks does not charge any servicefees that decrement customer balances.While the Company will continue to honor all stored value cardspresented for payment, management may determine the likelihood ofredemption to be remote for certain card balances due to, among otherthings, long periods of inactivity. In these circumstances, to theextent management determines there is no requirement for remitting cardbalances to government agencies under unclaimed property laws, cardbalances may be recognized in the consolidated statements of earnings in"Income and other income, net." For the 13 weeks ended January 1, 2006,income recognized on unredeemed stored value card balances was $1.2million. There was no income recognized on unredeemed stored value cardbalances during the 13 weeks ended January 2, 2005. <end>Please be aware that Q1 2006 was the first quarter that Starbucksrecorded income related to expected unredeemed balances.If you are interested in reading the full 10-Q filing, please visit usonline at http://www.starbucks.com/aboutus/investor.asp. Just click on"Starbucks SEC Filings."...>>>There you have it, straight from the coffee pot,Ivan
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