"dixiepokerace" wrote...
Without giving away anything in copyrighted publications, how does one account for comps, free play, bounceback, et cetera, for purposes of computing total return?
I believe your question is difficult to answer without knowing WHY you're trying to account for these things. Are you trying to calculate the relative attractiveness of multiple competing offers in order to choose one to play? Are you trying to figure out what to report on your taxes come April 15? Are you trying to discern how good (or bad) this hobby is for your pocketbook? Each perspective will yield somewhat different answers.
I have read that some people count free play at face value, and that others count non-cash comps based on the value to the individual (if you don't golf, how much is that golf bag worth?).
IMHO, for estimation purposes PRIOR to actually collecting free play, you should estimate the value of free play not at face value but rather at the ER of that free play on the game you expect to redeem it on... e.g. if you get $100 of free play that you expect to redeem on a 9/6 JOB machine, you should estimate the value of that free play at $99.54. Of course, after redeeming that free play, it makes sense to book it based on whatever value you actually collected from the free play. For example, in our logbook my wife and I might write:
4/2/10 1530 IN: $20, $0.25 9/6 JOB [many free play offers require you to "prime the pump" with some cash, but "IN: $0" might also be possible]
4/2/10 1530 FREE PLAY: $100, $0.25 9/6 JOB
4/2/10 1630 OUT: $70, $0.25 9/6 JOB
In this example, we can determine that we played an hour and profited $50 (which we consider subject to reporting on our taxes). We can't specifically determine whether that profit was earned from the actual cash-in or from the free play, but in reality it doesn't matter -- all that matters is the state of your wallet before and after play.
I ask only because my way around the issue is to account for comps as they are REDEEMED rather than when they are earned. If I don't take advantage of an offer for tickets to M.C. Hammer, then they are of no value. Free play is counted as face value only after it has been played and also counted as money in when computing net VP-only profit or loss. Discounted rooms are counted only when actually using the rooms, at the rate of lowest rate available at kayak.com less whatever I had to pay (for example, the $29.99/night deal at the HRH versus the $70 quote that day at kayak.com gives me a ~ $30 value after taxes and the "resort fee").
I find that this method, while moving perceived earnings from one month to another, accounts better for things like points expired before I could use them or possibly losing the credits before being able to cash them in (Hooter's?).
I generally agree with you; certainly that golf bag has zero value to me (since I don't golf) unless I know for certain that I can sell it to someone else for a particular price, in which case I may assign it that resale value. I believe that comps can be valued as you describe, but only if you would actually expect to purchase the item or service in question even if you didn't have the comp. For example, let's say you receive a spa comp for $100 and use it to get an hour massage, and let's further assume that $100 is a fair market price for that service. Personally I would only recommend tallying that comp if you were likely to get a massage anyway (maybe you get one every month). If you were the sort of person who said "I don't really care about spa services, but what the heck, the comp is there, I'll get a massage", I would recommend valuing that comp at ZERO, since your wallet would look exactly the same whether or not you had that comp... even though (hopefully) your life was at least slightly improved by the massage.
In our household we're quite conservative and value all comps at zero dollar value both before and after play, even if the comp was actually something we would've bought anyway. Obviously the comps we redeem do improve our lives in some way, but often that value is very difficult to judge objectively, so we don't mix it in with our actual cash returns. (That fancy steakhouse dinner was indisputably better than eating a cup of Ramen Soup, but was it $20 better? $40 better? Who knows? Let's call it zero and know we actually came out better than our records indicate...)
Good luck and have fun!
--Joe