Gift vouchers in franchising: who pays when they are redeemed?

A customer pays with a network gift voucher, and your outlet supplies the goods or provides the service. Who reimburses you, and when? Across a franchise network, a shared voucher scheme can help attract customers, but without clear settlement rules it shifts costs between independent businesses. Before buying a franchise, check not only whether you must accept vouchers, but also how the money moves from their sale to your bank account.

1. Establish who sells the voucher and is responsible to the customer

The logo on a voucher does not determine who is responsible for honouring it. The issuer may be the franchisor, a separate company running the scheme or an individual franchisee. The voucher seller, the business receiving the payment and the outlet accepting the voucher need not be the same business.

Ask for the customer terms and conditions and an explanation of how payments are settled between scheme participants. Establish:

• who issues the vouchers and who receives the proceeds from their sale;
• whether vouchers are accepted at all outlets or only selected ones;
• whether they can also be redeemed online;
• who handles complaints about balances, expiry dates or refusal to accept a voucher;
• whether customers can redeem a voucher in part and pay any remaining amount by another method.

Distinguish between a voucher purchased with money, a free promotional coupon and loyalty points. A similar appearance in an app does not mean they have the same funding arrangements or tax treatment. Each mechanism should be explained separately.

Warning sign: the agreement requires you to accept every payment instrument introduced by head office, but does not specify how you will be reimbursed. A clause like this needs clarification before you sign.

2. Trace the settlement of a single transaction

Ask for an anonymised example showing the settlement of a voucher sold by head office and redeemed at a franchisee’s outlet. An assurance that “the system settles everything automatically” is not enough. The document should show the sale value, deductions, the amount due to the outlet and the payment deadline.

Above all, check whether you receive the full value redeemed or an amount reduced by the scheme operator’s commission, promotional costs or other charges. If head office sells a voucher at a discount, establish who covers the difference between the customer’s payment and the value of their purchases. Do not assume the scheme organiser funds the discount.

Pay particular attention to three situations:

• You sell a voucher that the customer redeems elsewhere. Do you pass on the entire payment, or retain a fee for selling it?
• You accept a voucher sold by another outlet. Does your payment depend on that outlet having already settled with head office?
• The customer returns a purchase or complains about a service. Who adjusts the voucher balance and settlement records, and how are duplicate refunds prevented?

The payment deadline should be set out in the agreement or a binding schedule. Also agree on access to reports, the procedure for reporting discrepancies and the rules for setting off amounts owed by each party. This will make it easier to check whether you actually receive payment for the customers you serve.

3. Check the tax treatment and the legal basis for your obligations

Poland has no separate, comprehensive statutory framework for franchising. A franchise agreement is an “unnamed contract” — one not specifically defined by statute — governed primarily by the Polish Civil Code, including the principle of freedom of contract and the rules on performing contractual obligations and liability for breaches. Nor is there a specific statutory franchise disclosure document or a general requirement to provide one to prospective franchisees a set period in advance. You therefore need to obtain and agree the voucher scheme’s terms before entering into the agreement.

Vouchers are, however, subject to legislation including Poland’s VAT Act. This distinguishes between single-purpose and multi-purpose vouchers. In simple terms, for a single-purpose voucher, the place of taxation and the VAT due on the future supply are already known when it is issued. A multi-purpose voucher does not meet those conditions. The distinction affects when VAT becomes chargeable and how transactions must be documented.

Not every discount coupon is a voucher for VAT purposes. Before sales begin, an accountant should assess the specific model: issuance, transfer, redemption and the outlet’s remuneration. Also establish who documents the sale to the customer and how it is recorded through the fiscal cash register system. Head office’s instructions are useful operationally, but do not replace an assessment of your own business’s obligations.

Customer terms and conditions are also subject to general consumer protection rules. Do not assume that a restriction is lawful simply because it appears in the terms and conditions.

4. Plan for system failures and leaving the scheme

Ask for a procedure covering system outages. Can you accept a voucher without electronic confirmation of its balance? Who bears the cost if it is redeemed again or incorrectly authorised? Staff should have clear instructions rather than having to choose between an unhappy customer and the risk of a financial loss.

Also establish when you must stop accepting vouchers after leaving the network, the deadline for final settlement and how subsequent adjustments will be handled. Check what happens to vouchers you have sold that have not yet been redeemed. Obligations towards customers and settlement arrangements with head office should be consistent.

Practical takeaway: before buying a franchise, obtain the voucher terms and conditions, a money-flow diagram and a sample settlement report. Only when you can identify who pays, how much and by when for every redemption can you properly assess the cost of participating in the scheme.