Question

Accounting Information Systems

Our store, store name is a “gray market” distributor of software license keys. This means we are reselling software keys for popular software from reputable vendors, including but not limited to Microsoft, Adobe and SAP. The licenses may or may not be directly obtained from the original vendor. For example, we may be selling Windows 10 keys many times cheaper than their retail price. For example, the level of validity that we can attest to a software license we sell.

This is accomplished through a number of means, including but not limited to obtaining “extra” keys from enterprise administrators that were purchased legitimately at volume. This is our market niche. Customers come to us because our prices are very cheap for otherwise rather legitimate keys. We have a great variety in both price and quality between our products that we offer.

Our customers typically know exactly what they are looking for, so we do not have to spend much in marketing. Instead, we have optimized our website to appear in searches on common search engines when “cheap office / windows / SAP” keys are punched in.

The customer is taken to a landing page that allows intuitive navigation to the necessary software license. We pair with reputable transaction facilitators, such as PayPal, AmazonPay and PayProGlobal. After the order has been placed the requests are added to Review Batch for Reconciliation.

This makes a preliminary automated entry in our web-based AIS. An accounting clerk periodically verifies the validity of these requests and ensures that payments are posted on the receivables end, and confirms that the goods have been electronically delivered to the customer through their provided email. Since we are not the original creator of the goods we sell, it has proved challenging to ensure delivery and receipt of goods. We have come up with a technological solution - an HTTP request to a Web Application Programming Interface is embedded within the email containing the license key to ensure that the customer has successfully opened the email. This fulfills the requirements of the revenue recognition principles by confirming the delivery of goods to the customer.

Since we cannot always ensure the quality of goods, beyond sample testing, we offer a very generous return policy on our keys. The customer must first request a replacement if the key did not work. The customer’s screen is shared with a support technician to combat fraud and abuse. If the software fails to register successfully on the second attempt, a refund is issued.

Note: This is the Narrative I have written so far, but need help extending this with more explanation. (The Store name "Gray Market" is made up and is not a real store.)

Answer 1

The gray market is selling the software licences that are already purchased by Gray market at a cheap price i.e., less than retail price.

The customers are typically known about the licence keys. So less advertising.

When the customer place an order, it will first be verified by the Review Batch for Reconciliation,

The amount so paid was credited to receivables end.

Since delivery & receipt of goods has become very challenging, We have come up with a technological solution - an HTTP request to a Web Application Programming Interface is embedded within the email containing the license key to ensure that the customer has successfully opened the email. This fulfills the requirements of the revenue recognition principles by confirming the delivery of goods to the customer.

While placing return request the customer first place a return request & should provide screen with technician to resolve. Even after attempting second time for licence key, fails then refund process will begin.