2. Confidential REASONS TO THRIVE IN O5

3. Confidential Mission Statements Childrens Orchard Mission To redefine and lead the childrens resale category Corporate Mission To build prosperous retailers and valuable businesses

4. Confidential Reasons #5 Controlling the Cube: Using Cache Cards and Gift Cards to Make Us Prosperous

5. Confidential Purpose Build your machine through proper handling, accounting, and protection of these valuable tools.

6. Confidential Cache and Gift Card Transactions 30,000+ Transactions!

7. Confidential Gift Card Transactions Gift Cards cannot be reloaded

8. Confidential Gift Cards Ringing a Gift Card Sale

9. Confidential Gift Cards Redeeming a Gift Card

10. Confidential Gift Cards Recording Gift Card transactions on your weekly report

11. Confidential Cache Card Transactions Recycle your Cache Cards!

12. Confidential Cache Card Transactions Differentiating the $35/$10 and $30/$10 store credits

13. Confidential Cache Card Transactions Ringing transactions through the sales register

14. Confidential Cache Card Transactions Gathering your information Interactive Buy Register Closing Sheet Save as 05_25_05_buys

15. Confidential Cache and Gift Card Transactions Gathering your information Charge Slips $10 Promo Redeem/ Credit Gift Card Transactions

16. Confidential Cache and Gift Card Transactions Gathering your information Interactive Sales Register Closing Form Save as 05_25_05_buys

17. Confidential Cache Card Transactions Gathering your information Tracking the results

18. Confidential Protecting Your Cache and Gift Cards Minimize employee access Reconcile to the Batch Report daily Randomly check authenticity

19. Confidential Protecting Your Cache and Gift Cards

20. Confidential Protecting Your Cache Cards Run the Batch Report

21. Confidential Protecting Your Cache Cards Reconciling to the Batch Report

22. Confidential Protecting Your Cache Cards Reconciling to the Batch Report From Daily Buy Register Close Sheet From $10 Promotion Cache Card Sheet From your Interactive Daily Sales Register Close Sheet

23. Confidential Protecting Your Cache Cards Check Authenticity

24. Confidential 5/3 Online Services https://direct.53.com User Name Password Wanda Korgol 1-248-603-0430 Or Rick Kneller 1-513-358-5753

25. Confidential 5/3 Online Services Reports of interest ReportProgramFrequencyDescription DM-562dailyAll of that days transactions for Gift and Cache Cards CM-560Program: your merchant ID monthlyMonthly activity for Cache Cards CM-560Program:0100monthlyMonthly activity for Gift Cards CM-561monthlyMonthly Aging and expirations of Cache and Gift Cards MM-431monthlyReport of Gift Cards that were issued at your location, but redeemed at another location

26. Confidential Accounting for Cache Cards No communications from Children's Orchard, Inc. are intended to provide tax, accounting, or legal advice. We suggest that for such advice you contact the IRS and your local state taxing authority and/or hire a qualified accountant or tax attorney to review your questions.

27. Confidential Reap all of the rewards of these sales tools by properly recording entries on your books In addition to * Driving sales * Increasing cash flow * Raising Average Ticket * Increasing customer purchase frequency * Building customer loyalty... Accounting for Cache Cards

28. Confidential Accounting for Cache Cards Every $ loaded to a Cache Card as either a Sellers Bonus or a Promo can be booked as a Non-Cash marketing expense (not part of minimum 3% ad spending) Reduces your taxable income Your taxes go down without expending cash

29. Confidential Accounting for Cache Cards AccountType Store CreditsLiability Non-Cash Promo:Expense Cache Card PromoExpense St Cr Sellers BonusExpense You must have these in your Chart of Accounts:

30. Confidential Accounting for Cache Cards Recording a $10 Cache Card issued as part of a promotion:

31. Confidential Accounting for Cache Cards Recording a Cache Card issued for a Buy (50% Store Credit Bonus):

32. Confidential Accounting for Cache Cards Redeeming a $10 Cache Card (margin = 65%):

33. Confidential Accounting for Cache Cards Daily Sales Journal Entry will capture Cache, Gift Card sales, redemptions

34. Confidential Accounting for Cache Cards Daily Buy Journal Entry will capture Cache Cards issued for Buys

35. Confidential Accounting for Cache Cards Record Cache Card Promos MONTHLY. Take totals from tally sheets or 5/3 Monthly Detail Report. Example: Issued 200 $10 promos

36. Confidential Accounting for Cache Cards If youre in the 25% Tax Bracket, reducing your taxable income by $2,000 could save you $500 in taxes

37. Confidential Build Your Machine! Implement proper handling, accounting, and protection of your Cache Cards and Gift Cards.

38. Confidential Mission Statements Childrens Orchard Mission To redefine and lead the childrens resale category Corporate Mission To build prosperous retailers and valuable businesses

39. Confidential REASONS TO THRIVE IN O5