Revenue Recognition Footnote

6 Months Ended

Jul. 31, 2021

RevenueRecognitionAndDeferredRevenueAbstract

Deferred Revenue Disclosure [TextBlock]

NOTE 11 – REVENUE RECOGNITION:

The Company recognizes sales at the point of purchase when the customer takes possession of the merchandise and pays for the purchase, generally with cash or credit. Sales from purchases made with Cato credit, gift cards and layaway sales from stores are also recorded when the customer takes possession of the merchandise. E-commerce sales are recorded when the risk of loss is transferred to the customer. Gift cards are recorded as deferred revenue until they are redeemed or forfeited. Layaway sales are recorded as deferred revenue until the customer takes possession of, or forfeits, the merchandise. Gift cards do not have expiration dates. A provision is made for estimated merchandise returns based on sales

volumes and the Company’s experience; actual returns have not varied materially from historical amounts. A provision is made for estimated write-offs associated with sales made with the Company’s proprietary credit card. Amounts related to shipping and handling billed to customers in a sales transaction are classified as Other revenue and the costs related to shipping product to customers (billed and accrued) are classified as Cost of goods sold.

The Company offers its own proprietary credit card to customers. All credit activity is performed by the Company’s wholly-owned subsidiaries. None of the credit card receivables are secured. During the three and six months ended July 31, 2021, the Company estimated customer credit losses of $,144000 and $275,000, respectively, compared to $,116000 and $185,000 for the three and six months ended August 1, 2020, respectively. Sales purchased on the Company’s proprietary credit card for the three and six months ended July 31, 2021 were $4.8 million and $9.2 million, respectively, compared to $4.3 million and $6.9 million for the three and six months ended August 1, 2020, respectively.

The following table provides information about receivables and contract liabilities from contracts with customers (in thousands):

	Balance as of
		July 31, 2021		January 30, 2021
Proprietary Credit Card Receivables, net	$	8,903	$	9,606
Gift Card Liability	$	6,302	$	8,155