Gift cards, prepaid packages and memberships when you sell a spa

Why does a buyer restate my revenue for prepaid sales?

If your books are on a cash basis, they record a package when the client pays for it, while a buyer is paying for earnings in the period they are earned. VMG Health, a diligence firm, gives a med spa example in a 2025 article by two of its CPAs, Lukas Recio and Jacob Mullen: a med spa might run a December holiday sale on prepaid neurotoxin packages for treatments delivered the following year. On cash-basis books, December revenue jumps. Accrual accounting records that revenue when the injections are done.

The same article says the financial due diligence that private equity buyers routinely run on med spa acquisitions adjusts revenue for prepaid and packaged services, memberships and gift card sales. VMG describes working from billing and sales data, unearned revenue reports, and package and membership details to convert cash-basis revenue to accrual (under the accounting standard ASC 606). Ankura Consulting Group lists the same adjustment among the revenue recognition focus areas in its article on med spa financial due diligence.

That published commentary comes from firms that review med spa deals for private equity buyers. An individual buying a day spa with an SBA loan may never hire one, but the arithmetic on a gift card is the same: you kept the cash, and if the buyer honors the card, the buyer's therapist does the massage.

How much does a restatement change my earnings?

A restatement shifts package revenue between periods. A laser hair removal series sold in November and finished the following spring moves out of the year you sold it and into the months the sessions are done, and last year's holiday gift cards redeemed this year move in. If your outstanding balance is about the same size every December, the change to annual earnings is small. It gets large when the balance has grown, for example after a bigger holiday promotion than usual. VMG's broader point is that cash-basis books can make earnings look more volatile than the business really is.

BizBuySell measures spa sale prices as a multiple of seller's discretionary earnings (SDE), the measure it uses for businesses with owner earnings under about $1 million. It says businesses earning more than roughly $1 million to $2 million often switch to EBITDA, because private equity or competitor buyers expect to pay a manager to replace the owner-operator. Whichever measure a buyer uses on your spa, every dollar of earnings that moves out of the twelve months being priced comes off the price at that multiple. The published multiples for day spas and med spas show what that means for a business your size. Two things follow:

• Think twice about a big holiday gift card push or a discounted laser or neurotoxin package sale in the months before you go to market. You keep the cash, but a buyer's accountant can move that revenue out of your earnings, and the buyer may also ask for a credit for the unused balance at closing.
• Restate your own numbers first. If your books are on a cash basis, ask your CPA to prepare accrual-basis monthly revenue for the periods a buyer will review, so you can explain the December gift card spike and the months your series sales ran before the buyer's accountant finds them.

Are memberships an asset or a liability when you sell?

Both, in different places. In a med spa sale, the recurring revenue counts in your favor, according to one sell-side advisor. Tommy Newton of Xite, writing on the AmSpa site in May 2026, said membership programs, subscription skincare and repeat injectable visits have become more important to med spa buyers because they create annuity-like revenue that lowers volatility and perceived risk. The same article lists recurring revenue and patient retention among the things platform buyers prioritize. We found no primary source that puts a number on how much a membership base adds to a multiple. We could not trace the figures that circulate online to one, so ask anyone who quotes one where it comes from.

The liability sits in the credits. If your membership lets an unused monthly facial or massage roll over, each banked credit is a treatment you have been paid for and have not delivered, the same as a prepaid package. Banked credits are unearned revenue, and diligence of the kind VMG describes reviews membership details alongside unearned revenue reports. If you plan to change how credits roll over, ask counsel first and do it well before a sale.

What happens to membership billing when the spa changes hands?

A membership bills a card on file, so whether billing carries on after closing depends partly on your payment processor. Zenoti's help documentation for ownership changes in Zenoti Payments, for example, says saved client cards re-link automatically once the spa is connected to the new owner's merchant account, but chargeback liability moves to the new merchant account and refunds on invoices from the previous merchant account are not allowed. On that platform, a client asking for money back on a package you sold before closing runs into that refund rule. The same page tells a new owner to start identity verification at least 4 to 7 days before handover, and payment processing is unavailable until it is complete. If the buyer already uses Zenoti Payments, unlinking your account needs a one-time code sent to your registered email, so plan to be reachable on handover day.

Settle in the purchase agreement who handles refunds and chargebacks on sales made before closing, and ask your own booking and payment provider how it handles a change of owner. The guide to handing over bookings, reviews and payments covers the rest of handover day.

How are unused gift cards and packages settled at closing?

Taken together, the sources below describe three ways the balance can be handled at closing. Which one fits depends on the size of the deal and on whether you sell the spa's assets or the company that owns it, as the table explains. What we found is commentary from diligence firms on how prepaid balances are adjusted in due diligence, and one Ankura case study in which prepaid liabilities were accounted for in a working capital target.

In a small asset sale

Small, privately owned businesses usually sell as asset sales, according to an undated article in BizBuySell's Learning Center by Sheila Spangler, a business broker at Murphy Business Sales, and buyers prefer them because they take on only the liabilities they expressly agree to assume. The same broker describes the usual pricing as cash-free and debt-free: you keep the cash and receivables, pay off payables and debt, and the price covers a normal level of inventory (for a spa, retail skincare and backbar product), the equipment and the goodwill.

The money your clients paid for their laser series and massage packages stays with you, and the buyer takes on those packages only if it agrees to. A buyer who wants your clients to keep booking may agree to honor the packages and ask for a credit for the balance in return. For example, if clients hold $30,000 of unused packages and gift cards at closing (an example figure), the buyer may open by asking for $30,000 off the price.

The negotiation is over how much of the face value. You can argue that the credit should reflect what it will cost the buyer to deliver the treatments, meaning the provider's pay and the product, rather than the full price the client paid, and that some balances will never be redeemed. Check that second argument with counsel first, because unredeemed gift certificates may not be yours to keep: in New York, gift certificates left unclaimed for five years are deemed abandoned property.

In a sale of the company

If you sell the entity itself, the buyer inherits all of its liabilities, known and unknown, as a law firm writing about med spa sales puts it, which is why buyers often prefer to buy assets instead. Every open gift card, laser series and banked membership credit comes with the company, so settle in the purchase agreement how that balance is counted in the price.

In a private equity or larger deal

Private equity med spa platforms and other larger buyers are more likely to price against a working capital target, with a true-up after closing. SRS Acquiom's 2026 working capital study found these adjustments in more than 90% of the private-target deals in its data, up from 50% a decade earlier. Its data generally covers larger sponsor and strategic deals, not Main Street spa sales. Prepaid balances can go into that target: in one engagement for a mid-market private equity firm running a multi-state med spa roll-up, Ankura estimated net working capital targets that accounted for prepaid liabilities, inventory levels and the timing of vendor payments, to support purchase price adjustments and working capital true-ups.

If you are selling a med spa to a platform, read the working capital definition in the letter of intent as closely as the headline price. A peg that counts your prepaid balances as a liability on the closing date moves money the same way a credit does, partly at closing and partly in the post-closing true-up, and it is easier to miss in a letter of intent. The guide to selling a med spa covers the rest of a platform deal's terms.

What gift card laws apply when you sell a spa?

Start with the federal floor. Under Regulation E, the CARD Act gift card rules at 12 CFR 1005.20, money on a gift certificate or store gift card generally cannot expire sooner than five years after the card was issued or last loaded. Dormancy or inactivity fees are allowed only after a year with no activity, and then only under conditions the rule sets out. Loyalty, award and promotional cards are excluded, and states can be stricter.

In a sale, that means a massage or facial gift card a client got as a birthday or holiday present years ago may still be good, and the client will expect it to work after the ownership changes. Before you treat an old balance as dead, check it against the federal rule and your state's.

These are three states, not a map of the country. Unclaimed property treatment differs from state to state, so check the rules in every state where your spa sold certificates. This is a summary of what the statutes say, not legal advice. Take the questions for your attorney and CPA below to counsel in your state before you negotiate. If you run a day spa or massage business, the guide to whether a spa or massage establishment license transfers covers the licensing side of the same closing.

Will a buyer honor my clients' packages?

If it wants your clients to keep booking, it has a reason to. The closest public example we found does not involve a spa being sold. After Ideal Image's restructuring in late 2025, Advanced MedAesthetic Partners said in a May 2026 release that its new Avelure Med Spa brand was setting up in markets where patients were seeking continuity of care and was honoring eligible prepaid treatment packages.

The release does not say whose packages those were or why AMP chose to honor them. A reasonable reading is that a patient holding an unused package has a reason to come back, and the same logic works in your favor. A buyer that honors your clients' packages keeps the relationships it is paying goodwill for, and that is your best argument for sharing the cost rather than taking the full balance off the price.

What records will a buyer ask for on gift cards and packages?

Build the same reports VMG works from, an unearned revenue report and package and membership details, from your booking and point-of-sale system before anyone asks, and reconcile them to your bank deposits. If the buyer's accountant is the first person to total your open gift cards, series and banked credits, you have lost control of the number.

• An unearned revenue report. Every outstanding gift card, package and membership credit on one schedule, as of a date you can update at closing, with a total.
• Gift cards by card. The last four digits of each card number, date sold, amount loaded, remaining balance, and the state where it was sold if you have more than one location.
• Packages by client. What was bought (a laser hair removal series, a block of neurotoxin units, a set of massages), the price paid, sessions or units used and left, and the terms printed on the receipt.
• Memberships by member. Start date, monthly dues, banked credits, and cancellations by month.
• Concentration by client. Whether a handful of clients hold most of the balance, checked against the clients who still book.
• Accrual-basis monthly revenue. Your CPA's restatement, so a December spike like the one in the VMG example is explained before a buyer finds it.
• A promotions calendar. When you ran prepaid sales and at what discount, because the deeper the discount, the less cash you took in for each treatment the buyer still has to deliver.

Share the totals first. Client names and full card detail belong in the data room once a letter of intent and a confidentiality agreement are signed. The spa due diligence checklist puts these next to the other documents a buyer and lender request, and the 12-month plan for preparing a spa for sale covers when to clean them up.

Questions to take to your attorney and CPA

These change what you keep, so raise them before you sign a letter of intent.

• Do my packages, series and membership credits count as gift certificates under my state's law, and do any old balances have to be reported as unclaimed property?
• If I give the buyer a credit for the balances, or the buyer assumes them, how is each treated for tax on my side of the deal?
• What does the purchase agreement say about refunds and chargebacks on sales made before closing, and who tells clients about the change?
• In a med spa, which entity sold the packages, the medical practice or the MSO, and is that the entity being sold?

To see what your spa could sell for, request a free valuation or estimate a range for your spa first. If you have built the schedule above, the total is enough for now. Requesting a valuation does not list your business, and details about your business are not shared with prospective buyers without your permission. For the full sequence of a sale, see how to sell a spa business, step by step.

Sources

All sources accessed September 29, 2026.

1. VMG Health (Lukas Recio, CPA and Jacob Mullen, CPA), 2025-06-11
2. Ankura Consulting Group, 2025-08-28
3. BizBuySell (CoStar Group), Undated
4. BizBuySell (CoStar Group), Undated. Accessed 2026-09-29.
5. BizBuySell (CoStar Group), Undated. Accessed 2026-09-29.
6. American Med Spa Association, 2026-05-15
7. Zenoti, Not dated on page
8. BizBuySell Learning Center, Undated on page
9. Spencer Fane LLP (Crystal L. Howard, Hillary R. Martel), 2025-08-19
10. SRS Acquiom, 2026 Working Capital Purchase Price Adjustment Study, 2026
11. Consumer Financial Protection Bureau (12 CFR 1005.20), Current regulation as accessed 2026-09-29
12. California Legislative Information (Civil Code 1749.5), Added by Stats. 2025, Ch. 207
13. New York State Senate (Abandoned Property Law 1315), Last modified 2014-09-22
14. The Florida Senate (Florida Statutes 717.1045), 2025 Florida Statutes
15. Advanced MedAesthetic Partners (PR Newswire), 2026-05-13