No paypal, no cheque, no bank account... Another way to pay

This is just a quick post about a payment issue that came up this weekend on my website shop, as I thought the way we (the customer and I) resolved it might be useful to other sellers.

I had an order come through my website, and the customer chose to “pay by post” which means that they wanted to pay offline rather than using Paypal. My usual methods of offline payment are cheque or direct bank transfer. Unfortunately in this case, the customer was an American who had just recently moved to the UK, and they were still in the process of setting up UK bank accounts. Their Paypal account was frozen due changing address and country of residence, and they could not pay by credit card on Paypal either (possibly because their credit card was from an American bank? I’m not sure). Also due to the bank accounts problem they didn’t have a £ cheque book yet, and couldn’t do a direct bank transfer. The customer emailed me to tell me all this but said she was DESPERATE for her cat to have a new Union Jack cat collar (and a Stars and Stripes one too, so he wouldn’t forget his heritage!).

I was a bit stumped! She offered to send cash through the post but obviously that wasn’t a great idea, the next idea was to meet up and swap cash for collars – she lived in London, so that might have worked, except London is a big place and who really has time to do that!

So I was trying to think of another solution, and while I was thinking, I visited iTunes to buy some apps for my new iPad, and then on Amazon bought a camera connector for my new toy, and also downloaded a few Kindle books. It made me realise how much money I spend on these two websites, and that’s when the idea hit me - my customer could buy me Amazon vouchers to pay for her order! They'd be as good as cash, since I buy things there all the time. Also, as a massive mainstream, popular website, Amazon.co.uk would certainly be able to take her American credit card with no problems.

I emailed her my idea with the link to order vouchers by email, and my preferred email address for her to use, and she did it straight away (although it took about 10 hours for the voucher to come through). You can enter any amount to send as a gift voucher, so it didn’t matter that the total of her order wasn’t a round £ number. As soon as I got the email, I applied the code to my Amazon account, and emailed her back to say I’d received the payment and would post the collars out to her. Brilliant!

Anyway, hopefully I won’t need to use this method very often, but it is useful to know it’s there when there’s no other option. I can’t imagine there are any tricky repercussions for tax or record-keeping either. Essentially, you have swapped your product for something else which is not cash, but which has a quantifiable cash value. I’m sure that I have read in some guidance or other that if you exchange your product for some other goods (say under a bartering scheme), you enter the monetary value of the goods you received into your accounts as an incoming. Since vouchers have a very clear monetary value, this should be as straightforward as entering the cash value. But I would note down what happened so if you ever got audited you could explain, and of course this is just my thoughts – I have no tax qualifications – so please don’t take this as gospel!