Episode 296

May 15, 2020

Many of us are in the position of needing to refund money from gift certificates. So how do we navigate this process?

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Introduction / Weekly Roundup

Discussion Topic

  • Many of us are in the position of needing to refund money from gift certificates. So how do we navigate this process?

Quick Tips



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Michael Reynolds Hey, everyone. Welcome to the Massage Business Blueprint podcast. Where navigating small business assistance programs is an Olympic sport. I'm Michael Reynolds.

Allissa Haines I’m Allissa Haines.

MR And we’re your hosts. Did you like that one?

AH I did. I liked it a lot. It just --

MR [Laughing] Welcome to the show today. We’re glad to have you with us.

AH I feel like everything we do at this point, every interaction regarding massage business, just has me shrugging my shoulders and shaking my head like, hmm, all right. This is where we are now. Okay.

MR Yeah. That’s where we are. Something new all the time. Speaking of new --

AH So let’s jump into that.

MR -- what are you reading?

AH Oh, sorry. Go ahead. Well, okay --

MR Oh, I think we had the same idea.

AH -- I was going to ask you that.

MR [Laughing]

AH I just started reading last night the Shonda Rhimes book. She's the producer and writer of shows that we like. Particularly, we both were super hooked on Scandal for a couple years.

MR Yeah.

AH And I haven't watched any of her other shows just because I don't have time to watch TV. I'm reading Shonda Rhimes's book, Year of Yes: How to Dance It Out, Stand in the Sun, and Be Your Own Person. And I'm only like a chapter in where she starts talking about how her sister said to her, you never say yes to anything and where she's kind of realizing that she has been closing herself off because she feels -- resisting situations that make her uncomfortable. And I am really, really excited to see where this book goes. I'm so into it. And I've been really into memoirs for a while. So I'm just super excited about this book.

What are you up to? What are you reading?

MR Nice. Oh, something far less interesting but fairly relevant to many people, I think. So this is an announcement that came out a few days ago, and this is reported by the American Bankers Association related to PPP loans. And specifically, the SBA has announced a safe harbor consideration for PPP borrowers with loans less than $2 million. Let me explain what this means.

This safe harbor thing, what it means is if you borrowed less than $2 million, which I'm going to go out on a limb and say is our entire audience, then you will not be under scrutiny for whether or not that loan was -- when you get the loan, you certify if you need it or not basically. So they're not going to basically look back and investigate that.

This came up because a few days ago in our private community, there was some chatter about -- there was a video someone posted where she was like, hey, the SBA is saying that the government may come back and ask you to prove that you really needed this loan, and there may be criminal prosecutions and all this stuff. And it was kind of scary, and people were concerned, and it sounded very scary. But this clarification came out on May 13th. The SBA published in a PPP Frequently Asked Questions memo on the 13th saying, hey, guys, if you borrowed less than $2 million, we consider you certified. We basically say that you do not have to do any more to prove that the loan was required for you based on COVID-19 uncertainty.

So this is good news. I want to reassure people that the SBA did come out and clarify that, saying they're only going to be potentially scrutinizing loans over $2 million. So the rest of us, we should have this safe harbor check mark where they're basically accepting that when we certified that we needed the loan, that we met that, and they believe that, and we're good to go.

So that came out recently. I want to be sure that's clarified for those who were concerned about having to maybe hand back the loan for fear of criminal prosecution if they feel there's a gray area. Just side note -- my own commentary -- I feel like pretty much any massage therapist getting PPP needs it, so I don't really see a lot of room for worry there. But in general, it's just a nice memo to have to clarify that.

Does that make sense, Allissa? Did I kind of explain that well enough?

AH It absolutely does. Thank you for that.

MR Okay. Good. Good.

AH Now what?

MR So with that, let's move on. First of all, let's show some love to our sponsor, Jojoba!

AH Yay, Jojoba!

Sponsor message As you know, I recommend HobaCare jojoba for use in your massage practice since it never goes rancid. It's safe for all clients, and it won't stain your natural fiber sheets. However, with all the extra handwashing we're doing nowadays, it might be a time to grab a bottle of jojoba for a bit of self-care. Jojoba is the closest thing in nature to the sebum that your skin naturally produces. Our skin can't keep up with these repeated washings, so one or two drops on the back on your hands is going to keep your skin soft and healthy. You, my friends, can get 10% off the price of the product on orders of $35 or more when you shop through our link massagebusinessblueprint.com/jojoba. I'm efficient today.

MR Thanks, Jojoba. Yeah, right on.

All right. What do you got today?

AH So we're going to talk about refunding clients, specifically providing refunds to clients who have prepaid sessions and packages and/or gift certificates. Many of us have put our businesses on pause for a couple of months and expect to be on pause for a bit longer than that, whether it be until our state says we can work again or maybe even past that because we have decided to be extra prudent and see how things go before we decide about going back to work.

So I don't know if I've said this on the podcast yet. I am shutting down my office and moving out. I decided that I cannot -- I am not comfortable with a multi-practitioner space with lots of clients coming in and out. I'm not comfortable that I can keep it as clean and safe as it needs to be. And I also think, due to the coagulopathy issues -- the clotting, the organ damage stuff -- I expect that I will be refraining from providing massage much longer than the state says I have to. That's a decision I'm making, and especially just the nervousness about having a multi-practitioner space and not being able to ensure that the proper protocols are being followed day-to-day when I'm not there. So anyhow.

I sent an email to my client base that said I am closing indefinitely and moving out of my office, and I expect to reopen elsewhere when we are on the other side of this pandemic. And I was very clear. I had said that could be six months; t could be a year and a half. I don't know. And I said in that email -- I actually stated the two reasons why I was leaving: safety in the office and also the coagulopathy issues. So I said I would be reaching out to my clients who have packages with outstanding credits to provide refunds, and also that people holding gift certificates should reach out to me because I don't always know who bought and received a gift certificate. Sometimes if people buy them online, I know who bought it, but I'm not certain who they gave it to. So I can't really proactively reach out to most gift certificate holders. But I can certainly proactively reach out to people who have outstanding packages.

So I sent that big email to my whole client base that was like, hey, here's the deal. Shutting down. I'll open again one day, but I'm going to give you refunds right now. And then I emailed each individual, and I said, I have shut down my office entirely and would like to send you a check for the remainder on your package. May I have your mailing address? I have people's mailing addresses because it's on my intake form, but some of these clients have been with me like 10, 12 years, and they may have moved. So I decided rather than deal with that confusion, I would proactively ask for mailing address. And also that would ensure that they know it's coming so they're not going to toss the envelope thinking it's junk mail or something.

So I did all that. I emailed those clients who have outstanding packages. And I also -- I took down my primary website, and I just put up a landing page. I closed out of that window, which I wanted to have it up because I wanted to be able to tell you exactly what it says. Let me go to that. I created a landing page that says -- it's got my logo at the top, and it's got an email subscription form, and it says, "Stay in the know. Haines Massage is indefinitely closed due to the COVID-19 crisis. Sign up here to be alerted when we reopen." And it's got the little Mailchimp subscription box. No big deal. And then, underneath it says, "Got a gift certificate? Email me to talk about your options." And the "email me" link has my email address. It opens an email. So there's that.

Those are the things that I have done so far. And let me tell you how it's gone. In that original email that I sent to my whole client base, I put a little P.S. in there. And it said, if your income is secure and you're wondering what to do with all that money that you haven't spent on massage, please consider a small donation in my honor to Healwell. And we love Healwell. I put a link to their donation page, and I said, Healwell has been creating wonderful resources for practitioners regarding the safety of going back to work. They are quite literally a life saver. So two of my clients have donated to Healwell. And one client who has a gift certificate, she proactively emailed me and said, I've got a one-hour gift certificate that my mom gave me last year, and I'm kicking myself for not getting in. However, instead of refunding me, I would love for you to donate that money to Healwell, which is so sweet. So I immediately went on and donated that money to Healwell and did it in her honor with her name. And I sent her that receipt and said, thank you again for doing this. So there was a nice paper trail that I, in fact, did as I was requested.

Yeah, I felt really good about that. A couple days later, I sat down at my computer, and I have all of this recorded on a spreadsheet, all the outstanding packages, and I just started sending checks out. As people send me their mailing address, I am sending checks out and recording it in the spreadsheet. I'll also go back into Acuity and void out all of those packages, but I'm just going to it do in one swoop after I'm done with all the refunds. And yeah, that's what I've done.

But some people have been asking, how do we handle this? And that's how I'm handling this. I have one client who I used to do home visits for way back in the day, and she said her husband bought her a five-pack of 90-minute massages, and he does that every Christmas. So I got like $600-and-something. She's only used one so far this year. And she emailed me, and she's so sweet. She said, neither of us have had our incomes impacted, so I really don't feel like you need to give us a refund. I'm happy to use the credits once you go back into practice. And also, if we never see a refund on that, we're okay, which was really sweet. So she is one client I am not going to refund because I have a feeling that when things become more safe, I will probably start back doing home visits maybe. So I replied and I said, you know what? I will keep your money for now, and you're on the shortlist of clients I will do home visits for if I start working again before I've found an office. And she's happy with that. I feel great about that. It's nice to have that little buffer in my savings. I guess my point here is that you might have a blanket policy about providing refunds for certain things, but it's also okay to make exceptions based on your client base and your individual relationships with clients where you have a good working relationship.

Some key points here. I had the bulk of this money set aside. I had about $5,400 of outstanding gift certificates, and I had about $4,000 in savings to cover it. So there's a little difference there. I pulled some money from that to contribute up to a certain amount to my retirement savings like two months ago, which is kicking me in the butt a little bit right now. But typically, I have the bulk of my outstanding stuff, credits, in a savings account. So this was not a crisis for me to find this money and start issuing refunds. And I have used my unemployments to buff up that savings account to bring it back up to where it needs to be for all of the refunds. If every package and every gift certificate was to be refunded, I have exactly the right amount of cash in there, which is partly luck and also good planning. I learned my lesson very early on that I want to set that gift certificate money aside.

So what if you don't? And this is a lot of people. This was me at one point too. What if you didn't set that money aside? What if you're not like me? You didn't close your office, and you're going to ride this out because your landlord's awesome, or you found the funding. What's your plan? If you're going back to work eventually, if you're confident you're going to go back pretty quick after your state allows or in a reasonable amount of time after your state allows or whatever, you can simply extend the expiration dates. If your gift certificates or packages expire seven years from now, you're not going to have to extend that too long. But you may choose to if any were going to expire in the next six months or in the last couple of months. You could choose to extend those expiration dates to a certain point so that people can use them up and you don't feel like you need to give them a refund. What if you are like me and you don't think you're going back to work any time soon or maybe ever? I know a few massage therapists who have decided that this is the swan song for them. They're done. They were thinking about leaving the field anyway, or they're taking retirement a little earlier.

But what if you don't have the money? What if you're closing your business down for a long time or forever, and you don't have the money? This is tricky. I don't have a fantastic suggestion for you because you kind of dug a tough hole, and it's going to be a little tricky to get out of. But first thing is you don't have to proactively offer refunds. You don't have to be like me and start telling people you're going to refund them their money because you can't. So don't offer it. Let people come to you. That will slow down the trickle at least and help you figure out a solution, so don't offer them. Let people reach out to you if they want a refund. Meanwhile, what you need to do is find the money. So that means you've got to pull it from your -- if you're getting unemployment, or pull it from your SBA grant if you got one, or your SBA loan, maybe your PPP. Maybe it means you're going to have to hustle delivering meals to people to get the money to refund your clients.

Maybe -- and I'm not saying that this is an appropriate option, but if you're shutting down your business completely, you need to check with your state laws because some states require that you have that money and that you turn it over to the state treasurer so that people can redeem. Some states like mine -- in Massachusetts, there's no legal requirement for me to refund for gift certificates if I close my business. Clearly, I think that's a less ethical option. I'm not going to shut my business down and then keep $5,000 of outstanding credits with people. I don't think that's appropriate. But you should definitely look into your state laws so you know what you're obligated to do versus what you are choosing to do, hopefully in the most ethical way. And that's my shtick. That's my little story. That's "simple-ing" this down as much as possible.

Michael, do you have anything to add?

MR Everything you said, and also just that this is one situation where I would borrow money. Coming from me, you know that's serious business because I never say borrow money because I hate debt. But if you owe someone for a gift certificate and they ask for it back and you don't have the money, I prioritize getting it back to them over your own debt. So I would say if your last resort is to borrow money to refund that to them, that's your obligation. You don't want to be known as the business owner that closed with people's money or kept people's money. That's ethically bad. It's bad for your reputation. It's just not the right thing to do. Yeah, whatever it takes. Get the money back to them so that you've got that clean, closed loop, and you've done the right thing.

AH Word. All right. Who's our next sponsor, dude?

MR Yomassage!

AH Oh, yay! Hey, I had the wrong sponsor listed up there, so let me bring up my Yomassage notes. [Laughing]

MR [Laughing]

AH All right. Well, let's vamp a little bit, then. Sorry about that. I thought that I had updated that, and I had given up my Yomassage talking points.

MR No worries. We have so many great sponsors we love, so. It's an understandable error.

AH Okay. Here we go. Sorry guys, I'm on pandemic weirdness too. Okay.

Sponsor message Yomassage, becoming an expert in all things -- restorative stretch, mindfulness, meditation, and therapeutic touch -- in a comprehensive, three-week virtual Yomassage therapist certification, this is within your reach. In this training, you will learn practices you can offer your clients virtually -- yay -- and an innovative modality that enables you to serve clients in a group or a one-on-one setting. This is awesome. You will build community with other therapists going through the training. There will be assignments due each week and weekly discussion posts and live Q&As and quizzes and one-on-one feedback from your instructor. Payment plans are available for the May and June virtual trainings. And this training offers 10.5 NCBTMB CE hours. And our Blueprint listeners can get $50 off courses in May through July using code BLUEPRINT -- one word, all caps, BLUEPRINT. You can find out more by going to massagebusinessblueprint.com/yomassage.

AH And I just want to say we were doing one of our office hours with premium members the other day, and there were like three or four people in there who took the Yomassage training, some in person, some online, and they spoke so highly of it. And a couple of them have been doing it virtually and are really excited to be in the training right now because it will enable them to work virtually but also, when things get a little safer, do work one-on-one with people that doesn't necessarily involve them being right in someone's face and breathing their air like massage would. So it's a really nice adjunct and potential modality for this weird time that we're going through. So that's my shtick. That's all I got. Yay, Yomassage.

MR Nice. Yay, Yomassage. All right. Quick tip time.

AH Let's hear a quick tip. Do you have one?

MR Yeah. So I'm going to cheat a little bit. My quick tip is go visit our new website. As you may have noticed, or maybe you haven't, we have a new website. It is, as always, at massagebusinessblueprint.com. It is streamlined. It is simplified. It's got all the podcasts episodes up there as you would expect, just like the old one. They look better, though. We've got kind of a simplified navigation, got some resources up there, got our blog posts. It's really cleaned up and simplified, and I’m in love with it. You can contact us there as well as always. And you'll notice that we have a nice call-to-action link to our new community which, like I said, you'll see a sign-up page there that says, hey, hang tight if you're in the old community, you can sign up. But those who are looking for the community who have not joined us yet, just give us a week or two or so to get things acclimated. And then we're going to open up the new community to the public for anybody as well at that point. So look over our site. Check it out. Give us some feedback. Let us know what you think. We are pretty happy with it.

AH We sure are. It's nice and pretty, and I love our new community platform. Michael didn't emphasize, so I will. One of the reasons we did this is to move our community platform, our discussion group, off of Facebook.

MR Yes.

AH We just needed to be done with Facebook because I find my blood pressure going up on a daily basis when I visit Facebook, and I'm turning into a monster. It's awesome because this new platform has all of our premium member resources and the community all in one place, and it's not Facebook. So we're super excited.

So let's talk about my quick tip. My quick tip is that if you need hand sanitizer, Pure Pro is making it. You guys know how much I love Pure Pro. They really heard the call where people were having trouble making their own hand sanitizer because they couldn't get the alcohol, or they didn't know the ratios to mix it. So Pure Pro has created a hand sanitizer. They're selling it small bottles and also in bulk -- just buy the bulk. So if you need that for your home or your office, I made a little quick code, massagebusinessblueprint.com/pureprohand. And then use the coupon code SAVE5. It's all caps, S-A-V-E-5, like the number numeric 5. Use that code at checkout, and it'll get you 5 bucks off. And I'll have all this in the podcast notes as well. But if you need the hand sanitizer, go get it from Pure Pro. And that's it.

That's all I got, Michael.

MR Nice. All right. Well, let's end it there. Well, thanks, everyone, for joining us today. Again, our website is massagebusinessblueprint.com. It is new and shiny. Go check it out. Send us a note if you like. And you can always email stuff to us at podcast@massagebusinessblueprint.com. We'd love to hear from you. Until next time, have a great day. We'll see you then.

AH Bye.