Mystery shopping isn’t always a money-making job. After all, when you combine travel expenses and required purchases with the low pay of some mystery shop assignments, it’s often hard to break even, much less come out ahead. There are some proactive measures you can take to ensure you make money as a mystery shopper, rather than lose money.
Check The Required Purchase. Many assignments require you to make a minimum purchase, often with only a small amount reimbursed. Mystery shoppers can get into a money trap when the cheapest item in a store is $10, but the assignment only reimburses $5.
First, on assignments such as these, ensure the store is selling something that you actually need and had already intended on buying. A good example of this is a typical grocery store assignment, where only $5 or $10 will be reimbursed, but you will be required to purchase ten items. Sure, you can buy ten candy bars or ten jars of baby food to break even. However, with a grocery store assignment, you can also purchase items that you “need”, such as toilet paper, milk, bread, and so on. While your $10 reimbursement won’t fully cover the cost of these items, you are being reimbursed on the cost of necessities rather than spending extra money buying something you don’t need and possibly don’t even want. Avoid the impulse to think only of “needs” as standard items you purchase on a regular basis. You may also “need” to buy your nephew a birthday present or a housewarming gift for your co-worker. Just make sure you planned to buy these gifts anyway.
Know When To Pass. There are some assignments that simply do not make sense for the mystery shopper to complete. Or an assignment may not make sense for one shopper, but may make sense for another shopper. For instance, take the mystery shop assignment of purchasing a high-end pair of sunglasses at a sunglass store with a minimum purchase of $75 and only $10 reimbursed. For many mystery shoppers, a high-end pair of sunglasses is not in their household budget this month, so this assignment would be a quick pass. After all, you would be out at least $65 after completing that assignment, although you’d have a nice pair of shades to show for it. However, if your sunglasses just broke and you aren’t the type of person who buys cheap sunglasses, this assignment might be the perfect answer for getting your sunglasses replaced at less cost to you.
Many assignments are not quite as clear cut as the sunglasses example. For some assignments, you need to have some insight before you accept the assignment as to what type of goods the store sells. If you see an assignment for Hal’s Jewelry with a $10 minimum purchase, you may want to check Hal’s website to ensure the store sells costume jewelry. The last thing you want to do is to walk into Hal’s and find out it’s a fine jewelry establishment where the cheapest thing you can purchase is $200! Every mystery shopper should absolutely take into account the required purchase when considering whether to accept an assignment or not.
Make Every Penny Count. For many mystery shoppers, writing off mileage means the difference to pay taxes on the majority of their mystery shopping income. The current mileage write-off is $0.55 per business-related mile traveled. This means every mile you travel from your home to the store, and back home again. So take a $10 assignment. If you travel just ten miles to get to that assignment, and then ten miles back home, your total mileage write-off would be $11 ($0.55 x 20 miles). This means that you can actually show a loss on your taxes for that assignment, making your pay tax-free! And the only thing you need to do to make that happen is to keep a mileage log!
Before you accept an assignment, simply do some quick math to ensure the required purchase and travel expenses won’t put you in the red on the assignment!
i have a problem with getting my money through the pay pal system either i am not getting paid for the surveys that i complete online or something is wrong with the pay pal system have anybody else experience this problem… i enjoyed this article especially the one about the sunglasses which i get a lot of these high priced non necessities items that i cannot afford let alone want to buy
Please check with your tax accountant before claiming your mileage as stated above. I have been claiming mileage for years due to my business expenses. My understanding is when you work outside of your home the mileage to the first job is NOT deductible and the mileage home from the last is not. Only the mileage in between is. These trips to first job and last before going home is considered going to work. Like I said check with your tax person. But this is my understanding and what I have done for years. If I am wrong, please advise me also. I am losing quite a bit of money, yikes. I usually try to schedule my day to the closest shop to the house and make a loop to finish at the closest home. I would love to hear from others.
Happy Shopping……….Go Shoppers!!!
Ghostorchid, I believe if your mystery shop business is based out of your home, you can then deduct the milage you drive to and from the assignment. If you are based out of an office, you can only deduct the mileage form the office to the assignment and back. Since most mystery shoppers have their business based out of their home, they are allowed to deduct the mileage from there and back. But as you said, it’s always a good idea to ask a tax professional to make certain. God Bless.
I believe Terry C. is correct. I have a great shop opportunity that could possibly answer that exact question but have one dilemma. The shop is for a tax office. How do I explain the type of work I do if they are also being shopped? I’m in a pickle with this one. Any advice would be greatly appreciated. I thought of saying that I’m a retail consultant.
There are many shops out there that don’t require a lot of paperwork. I just did some “gravesite” shops, retail with no purchase just a photo and an integrity shop. Nothing out of pocket and all in a route that was manageable.
My advice is to diligently seek out companies that you previously may have passed up and register, register, register. Eventually you will get an email or phone call.
Good Luck!! Happy Holidays!!
I think you can tell the tax office that you are a mystery shopper. How are they going to know you are doing a shop when you tell them that?
Naomi
Naomi,
Employees that work for a company that hires mystery shoppers know that they will be shopped. If I blow my cover I don’t get paid for the job or reimbursed. I can’t take that chance because this tax prep company charges quite a bit for their services.
I think the retail consultant is a good idea. It’s not really a lie and it doesn’t make one think of a mystery shopper. Good luck and happy holidays!
Ghosterchid, I just finished the H&R Block course and I also worked for IRS for 21 years before I retired in 2007. I have volunteered to prepare returns for AARP the past three years. PUB 17 2007 page 177, left hand column “Office in the home. If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business.” An example is: “Your principal place of business is in your home. You can deduct the cost of round-trip transportation between your qulifying home office and your client’s or customer’s place of business.” If your tax preparer did not let you claim the mileage, ask him or her to amend your return. If you did the return yourself, go ahead and take the round-trip mileage. Happy Holidays
Marilyn, just say you do retail merchandising shops/audits for parent companies-franchise owners. Tell them you are an independent contractor (that takes care of why you dont pay taxes on the income and why you keep track of mileage) and you do free lance work. I have done tax prep shops and used that as my profession and they didn’t dig any deeper than my being an independent contractor. That description answers a lot of their tax inquiry questions and directs them how to set up your forms. Hope this helps.
hello all,
I have a tax question with that day faxt approaching. Fast because I am not ready with my paperwork. My question is what are the legal deductions that can be taken as a Merchandiser/Mystery shopper. I file each year and seem to owe money. Last year I used one of the free cd’s like turbo tax or something and think that it was done wrong. I would like to have a professional amend it but don’t have the funds as yet to do that. Hopefully the assignmnets will start picking up soon!! The other question I have is has anyone found a good form for tracking mileage and assignments? I have tried to use Excel to create one but not sure if it is enough information if I want to use it for tax purposes.
Thanks