With a normal 9-5 job, there are hidden costs of working such as business lunches, a “second wardrobe” of business attire, and the expense of your commute. As with any other job, there are unreimbursed costs associated with mystery shopping, too.
These can include the cost of required purchases (some of which may be non-returnable), travel-related expenses, and even the cost of having a home office with a computer, internet access, and fax machine.
Most new shoppers are often surprised by the expenses associated with mystery shopping. They are not expecting these hidden expenses to eat away at their profits. Some shoppers may even feel like mystery shopping is not worth the effort.
The key to getting a paycheck you can be proud of is turning these expenses around and making them work in your favor.
On the road again. As with unreimbursed business expenses from any other job, the expenses associated with mystery shopping can also be written off on your tax return. Unless you are doing a phone shop, there is inevitably some travel cost related to each shop that you do. Let’s say you sign up to do a $20 shop that is 30 miles away.
That is 60 miles round-trip. In a typical car that gets 20 miles per gallon, you are eating up 3 gallons of gas to make the shop. With gas prices hovering close to $4 per gallon in many parts of the country now, that $20 shop just cost you $12 in travel costs alone.
You thought you were getting $20 profit from the shop, and in reality you are only getting $8. Experienced shoppers always take into account the cost of travel before applying for a shop.
When taking into consideration the cost of the travel, it is also important to take into account the amount of this expense you can write off on you taxes each year.
The IRS will currently allow you to write off $.505 per mile. So on that 60 mile shop, you can write off $30.30 on your taxes. Yes, you can write off more than the full amount of pay you received for the job. So in this example, you actually come out farther ahead by keeping track of your mileage! It may seem like a lot to write off, but this is how the IRS also credits you for the wear and tear and other maintenance costs you incur from using your car for business purposes.
You can take advantage of this by simply keeping a log book in your car and recording the mileage for each trip. It is highly recommended that you track all of your trips rather than just the ones that are further away. Those 5 and 10 mile trips will add up over the course of a year. This will equate to a big tax write-off when you file your taxes.
Of course, to avoid or limit travel expenses, you can consider taking shops much closer to home or doing phone shops.
Time is money. We’ve all heard this old cliché, but it could not be more true. Let’s face it, our time is valuable and we want to be paid for our time. We have all heard stories of shoppers who sign up for a shop and end up spending 1-2 hours on a shop that only pays $10 and that has a tremendous amount of paperwork required.
Read through each assignment carefully and try to gauge the amount of time it will require you to actually complete the shop. Is it a matter of you simply walking into the store and doing a quick purchase? Or do you need to review all of the displays, interact with the salesperson for so many minutes, and then complete a 50-question form? If you are required to make a purchase – particularly one that you do not need, are you only allowed to return that item no sooner than 24 hours later? If so, there is additional time involved in terms of the travel back to the store as well as the time to return the merchandise.
Be sure you understand the true time-cost of the shop and make sure you believe the pay is worth the time commitment involved. If not, pass over that shop and wait for either bonus pay or the next shop posted. Taking assignment that you feel have adequate compensation will make you a happier shopper in the long-run.
I want that! The majority of shops have a required purchase, with a minimum dollar amount for that purchase. Many shops will allow you to return an item, but often only after so many hours or days.
Be sure you read the fine print on the required purchase and refund policy before you commit to the job. If it is not an item you were planning on purchasing anyway, be sure you will be allowed to return it. Or otherwise, consider the cost of selling an unwanted item on eBay or in some other way. You may not be able to get the full amount back from re-selling it, but at least you would be getting some portion of it refunded.
You can also considering using these non-returnable purchases to buy early holiday and birthday presents. You are going to need to buy them at some point anyway, so why not make a few bucks for purchasing them?
Some shops, such as grocery shops and gas stations, may be worth your efforts even without a purchase reimbursement.
For instance, a $10 required and non-refunded purchase at a grocery store where the total shop pay is $20 is probably a good deal. You probably spend more than $10 at the grocery store on any given week anyway, so you are simply getting the $20 shop pay for doing something you normally would be doing anyway.
The required purchase and the return policy on that purchase are important aspects of the shop. The purchase can directly eat away at your profit, so be sure to check the shop requirements before you sign up.
Hidden expense or hidden treasure? It may seem like a hassle to keep track of all of the other hidden expenses of mystery shopping – such as internet, fax machines, and basic office supplies. However, keeping a monthly log of all expenses pertaining to your mystery shopping jobs will pay off on tax day.
Just keep in mind that you can only write off the portion of the expense that is used for your mystery shopping business. This may seem like an arbitrary figure for some items such as internet, so you will want to check with an accountant before filing your taxes.
The key to being a satisfied mystery shopper and enjoying your paycheck is to read the fine print in the shop requirements and truly understand the “cost” of doing the shop.
But don’t stop there! Be sure to use those hidden costs of the job to work in your favor. Experienced mystery shoppers make the shops work for them.
Your information is helpfull to an existing shopper, I did more shops in NY mainly the towns were relative close and you combine them with other activities, here in Florida the distances are greater between towns, you would need to do several in a day to make it worth while, I do fell their is a change in the amount of shops if you stop in an area and do not go out to other areas, this is especially true in Florida, regards Richard
Great information!
I have been looking through your regular e-mails for the last few months and I must say that it is a pleasure to read your straight forward tips and hints.
Although some of the information does not always deal directly with my situation, since I am from Canada, the latest update you had on keeping receipts, ledgers, etc., is true for everyone.
Being an accountant and bookkeeper, it is very true that there are a number of areas that people should be keeping their tabs on, including the fees of their office space, housing/mortgage, automobile expenses, utilities and many other areas, since they are actually keeping an office at their home-based area.
Another thing that I have always appreciated is the fact in which you do attempt to help people in Canada by giving us list for mystery shop providers in the area (unlike many other areas that just cluster them together).
Keep Up The Great Work!
Lise
I like your informative ideas and I’m glad you decided to make them available to all of us. We may not be able to use all the suggestions but I think most of them were very practical for all of us. Thank you for sharing and keep up the good work!!
I have found this website to have such great ideas and the people that add to the subjects of mystery shopping I have learned a great deal. Thanks to all for your help, its a team effort and it helps if we all stick together to help each other. Have a great day, THANKS AGAIN Kathy in Long Island NY
This is good to know when deciding on different mystery shop jobs to be selective at anytime.
I have found this information so valuable and really appreciate being able to visit this site for all its valuable information. I have really gotten a lot out of it and look forward to learning more in the future. I have only been shopping for a couple months, but have already done around 20 shops and I do take some that cost me, but I feel the knowledge and experience I am getting makes it worth it. There are not a lot of shoppers in my area so I am fortunate there also.