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mitdralla says

Question about deposits. I made a deposit and purchased something right away, but on my statement it states “Expires 12 Jan 14”.

How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

any ideas?

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chrisakelley says

Question about deposits. I made a deposit and purchased something right away, but on my statement it states “Expires 12 Jan 14”.

How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

any ideas?

deposits expire after 1 year but if you contact support they’ll extend it

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mitdralla says


Question about deposits. I made a deposit and purchased something right away, but on my statement it states “Expires 12 Jan 14”.

How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

any ideas?
deposits expire after 1 year but if you contact support they’ll extend it

Good to know, thanks!

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fillerspace says

How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

I’m not sure if it is different in Australia where Envato is based, but here in the US, deposits have expiration dates for the same reason gift cards do. It has to do with the accounting method corporations use. The common ones are cash and accrual.

The cash method is used by individuals and small businesses. With this method, revenue is recorded when received, and debts are recorded when paid. This method works best when the sales cycle is short (a locksmith orders $100 in parts for a door and records $100 of debt, and a week later you pay him $200 when he installs it and he records $200 in revenue).

This gets tricky with bigger companies or when the sales cycle is much longer. Imagine that a locksmith gets a contract with a 100 unit apartment to replace locks as people move out. He signs a contract with a lock supplier to purchase 100 door handles in packs of 20 over the next 5 years. In exchange, the apartment building will pay him $200 per door as residents move out. The problem with the cash method is that at any given time his accounting books might show a deficit if you look at them right after he purchased a 20 pack of locks (-$2000) but not many people had moved out.

With the accrual method, you record debts when they are incurred (when you agree to purchase 100 locks, even if you haven’t paid for any yet), and you also record revenue when it is earned (when you sign the contract to install 100 locks, even if you haven’t been paid yet). With gift cards or Envato deposits, the company books the revenue at the time of purchase, but they also record a liability in the same amount, representing your future purchase of that amount of goods or services. So the effect on the balance sheet nets out to 0 (they haven’t made a profit). When you do make a purchase, they can record a purchase and subtract from the debt column, and pay out a commission and subtract from the asset column, and record a profit. If you never make a purchase, however, they can never record that profit. That’s why they set an expiration date on deposits and gift cards, so that there is a fixed date in the future where the books can be settled.

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chrisakelley says


How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

I’m not sure if it is different in Australia where Envato is based, but here in the US, deposits have expiration dates for the same reason gift cards do.

actually thats not true, in most states its actually illegal for gift certificates to expire some states will allow them to expire after x amount of years but most wont allow it. The reason behind it is to actually protect consumers from being a victim of fraud. If a company ever tells you the gift care expires check the state laws(as it differs from state to state)

For the states that do allow gift cards to expire most require it to actually state on the card either front or back.

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mitdralla says


How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

I’m not sure if it is different in Australia where Envato is based, but here in the US, deposits have expiration dates for the same reason gift cards do. It has to do with the accounting method corporations use. The common ones are cash and accrual.

The cash method is used by individuals and small businesses. With this method, revenue is recorded when received, and debts are recorded when paid. This method works best when the sales cycle is short (a locksmith orders $100 in parts for a door and records $100 of debt, and a week later you pay him $200 when he installs it and he records $200 in revenue).

This gets tricky with bigger companies or when the sales cycle is much longer. Imagine that a locksmith gets a contract with a 100 unit apartment to replace locks as people move out. He signs a contract with a lock supplier to purchase 100 door handles in packs of 20 over the next 5 years. In exchange, the apartment building will pay him $200 per door as residents move out. The problem with the cash method is that at any given time his accounting books might show a deficit if you look at them right after he purchased a 20 pack of locks (-$2000) but not many people had moved out.

With the accrual method, you record debts when they are incurred (when you agree to purchase 100 locks, even if you haven’t paid for any yet), and you also record revenue when it is earned (when you sign the contract to install 100 locks, even if you haven’t been paid yet). With gift cards or Envato deposits, the company books the revenue at the time of purchase, but they also record a liability in the same amount, representing your future purchase of that amount of goods or services. So the effect on the balance sheet nets out to 0 (they haven’t made a profit). When you do make a purchase, they can record a purchase and subtract from the debt column, and pay out a commission and subtract from the asset column, and record a profit. If you never make a purchase, however, they can never record that profit. That’s why they set an expiration date on deposits and gift cards, so that there is a fixed date in the future where the books can be settled.

Thank you for this thorough response!

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fillerspace says



How can a deposit expire? Would that trigger a refund? It seems like it would have to go back to the user if it was a monetary transaction.

I’m not sure if it is different in Australia where Envato is based, but here in the US, deposits have expiration dates for the same reason gift cards do.

actually thats not true, in most states its actually illegal for gift certificates to expire some states will allow them to expire after x amount of years but most wont allow it. The reason behind it is to actually protect consumers from being a victim of fraud. If a company ever tells you the gift care expires check the state laws(as it differs from state to state)

For the states that do allow gift cards to expire most require it to actually state on the card either front or back.

That is true, but I left it out of the explanation for simplicity. For states where gift cards can’t expire (like California where I live), companies are allowed to charge a monthly fee after a set amount of time. Here it is $1 per month after 2 years of inactivity. That has the effect of gradually expiring the card.

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dekurvajo says

Well, i do agree with those countries who say it’s illegal. And i think there is a huge difference in between gift card <-> deposit. The gift card is a product itself. Where you immediately received a kind of service (which is transferable) something after you paid that money. Deposit is only a money transfer, which is belongs only to you, nontransferable, nonrefundable (not in this case) That money even have interest, inflation. Swallow that money without service is a fraud. Maybe its not illegal, but unethical indeed.

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adam1972 says
Fortunately (I’m hoping at least) it seems they are willing to re-instate your money after the fact :bigsmile: . I’m good with this if it’s helping them keep their books in order in a more efficient way. So long as I can get my money re-instated that is, otherwise I would have to agree… putting an arbitrary date in which the money becomes property of the seller would definitely be considered fraud if not theft. :dead: http://support.envato.com/index.php?/Knowledgebase/Article/View/232/54/why-do-deposits-expire-after-one-year-unless-i-renew-them
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