CONTRACT LIABILITIES

6 Months Ended

Jun. 30, 2020

CONTRACT LIABILITIES [Abstract]

CONTRACT LIABILITIES

Note 7. CONTRACT LIABILITIES

The Company’s contract liabilities consists of gift cards and loyalty rewards, for which the Company has a performance obligation to deliver products when customers redeem balances or terms expire through breakage. Our breakage policy is twenty four-month for gift cards, twelve months for Grocery loyalty rewards, and six months for Vapor loyalty rewards. As such, all contract liabilities are expected to be recognized within a twenty four-month period. Revenue is recognized when gift card and loyalty points are redeemed.

A summary of the net changes in contract liabilities activity for the six months ended June 30, 2020 and 2019 is presented below:

	As of June 30,
	2020		2019
Beginning balance as January 1,	$	26,823	$	442,630
Issued		42,611		64,452
Redeemed		(47,580)		(67,781)
Breakage recognized		(244)		(1,222)
Fulfillment of contract		(224)		(270,698)
Ending balance as of June 30,	$	21,386	$	167,381