LOYALTY OBLIGATIONS

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]


17. LOYALTY OBLIGATIONS

The Company has customer loyalty programs where retail customers accumulate points for each dollar of spending, net of tax. These points are recorded as a contractual liability until customers redeem their points for discounts on eligible products as part of an in-store sales transaction. In addition, the Company records a performance obligation as a reduction of revenue based on the estimated probability of point obligation incurred.

As of December 31, 2021, the loyalty program had a calculated standalone selling price that ranged between $0.05 and $0.08 per loyalty point. Upon redemption, the loyalty program obligation is relieved, and the offset is recorded as revenue. The Company estimates that 25% of points will not be redeemed (breakage) and expects the remaining outstanding loyalty points will be redeemed within one year. As of December 31, 2021, there were approximately 111,000,000 points outstanding, with an approximate value of $2,620, which is included in accrued liabilities on the Company’s Consolidated Balance Sheet.

The Company modified the loyalty program in 2022. The new loyalty program has a calculated standalone selling price that ranges between $0.03 and $0.06 per loyalty point. Upon redemption, the loyalty program obligation is relieved, and the offset is recorded as revenue. The Company estimates that 25% of points will not be redeemed (breakage) prior to their 6 month expiration dates. The Company continues to evaluate breakage and redemption values to determine the standalone selling price. As of December 31, 2022, there were approximately 70,000,000 points outstanding with an approximate value of $3,582, which is included in accrued liabilities on the Company’s Consolidated Balance Sheet.