Mystery Shopper Tax Primer

Hi All--

In my last post I answered a Mystery Shopper Coach's Update blog reader's question about mystery shopping and the taxation of items you are reimbursed for during your shop assignment. As always, I’m not a tax professional, and you should speak to your tax advisor about these matters. But I always get tons of questions every tax season anyway.

Since we are now in the think of tax season, it’s time for me to roll out an article that a fellow mystery shopper named Cathy Plumb (who runs a popular forum aptly called Cathy’s Corner 2), kindly allowed me to re-publish for my readers. It’s from a couple of years ago, so the information may be dated, but it can give you an idea of items you should pay attention to and bring up with your tax professional this year.

The article is located at:

http://www.mysteryshoppercoach.com/mysteryshoppertaxprimer.html

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com

Copyright 2005 (article is copyright Cathy Plumb 2001) Melanie R. Jordan E-Publishing

Mystery Shopper Taxes & Reimbursements (Ask The Coach)

"Question: I get confused when it comes to reimbursements--what gets declared, and what doesn't?"

(Editor’s Note: Here is a response I have received from the past from a person who knows more about taxes and its relation to mystery shopping than I do. I'll pass it along to you to give you food for thought when you work with your tax professional, as I am not a tax advisor and cannot advise as to the accuracy of the info and her reply may be dated since it is from 2002. How's that for a disclaimer)?

Answer From Melanie: Depending upon the nature of the reimbursement, it may or may not be considered income. For example, if you are reimbursed for priority mail, that's not considered income, but you also cannot then claim the priority mail postage as a deduction.

Regarding reimbursements such as restaurant mystery shops, according to Ruth Perryman, a tax expert on mystery shopping matters (e-mail: perryman@web2riches.com), reimbursements that are "necessary and ordinary" are not taxable. Since it's both necessary and ordinary to purchase a meal in order to evaluate a restaurant (how can you
write your report otherwise), any reimbursement is therefore non-taxable.

The only time a reimbursement is taxable is in the rare cases when the reimbursement is more than you spent (there is a MS company that pays $5 reimbursement for a fast food meal that always costs less). In this case, you'd have to pay taxes on the reimbursement amount
that exceeds your purchase amount.

One caveat, if you receive Form 1099 that includes the reimbursement amounts, you can do one of two things. Preferably, you should contact the company, tell them they sent you an incorrect 1099 and ask them to send a revised one (I say preferably because educating MS companies help all mystery shoppers). If you choose not to go this route, then you should claim the full income shown on the 1099 and expense the reimbursement amount on the 1099. In other words, even though you claim it so your business income matches your 1099, it still has no impact on your taxes.

(Copyright 2002, Ruth Perryman)

(Editor's Note: This is a very interesting perspective, however, once again please be sure to check with your own tax advisor for his/her opinion on this matter and any changes in IRS rulings).

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com

Copyright for all items except Ruth’s response, 2005 Melanie R. Jordan E-Publishing

Mystery Shopping & Social Security Numbers (Ask The Coach)

Question:

“I am concerned about giving my social security number out to companies that claim to use mystery shoppers. They say they need the number to complete the application, but I am uncomfortable making such personal, important information public. Why do they need it? Should I give it to them?”

Answer From Coach Melanie:

Mystery shopping companies ask for your social security number for future tax filing purposes, and, sometimes, as an identifier for your records. Mystery shopper income is taxable and, if you receive more than $600 in income from the company it is mandatory for them to give you a 1099 form (below that amount, it is optional).

Unfortunately there are quite a few frauds that go on with mystery shopping and you have to be careful about to whom you supply such information. Don't give out key information about yourself that can easily be used in identity theft to a firm before you ever do business with them, or at least check them out thoroughly. You can always add your social security number later on once you are comfortable that you know who you are dealing with, and are actually doing work with the company.

For applications that “require” this field filled-in, just put in all 9's and if there is a comments section, note that you will supply your social security number upon receipt of your first
assignment, or e-mail the company separately to explain this (but never put your social security number in an e-mail—it's not secure.

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com

Copyright 2005 Melanie R. Jordan E-Publishing

Things You're Doing Wrong In Your Mystery Shopping Work: Part III

Failure To Follow The Shop Guidelines

There is a reason why each shop has guidelines and the shop form
asks for the information that it does. This is a form of market
research, and is carefully designed as a joint effort between the
mystery shopping company and the client to uncover information that
will help them reach their business goals. Your failure to follow
guidelines can ruin the research study and cause the mystery
shopping company you are working with not to get paid. If they
don't get paid, you don't get paid, and you won't work for them
again.

And this is not just an important point for newbies and beginners.
Experienced shoppers, especially when they get a regular shop
assignment, can easily fall into the trap of assuming they know the
drill, and miss updates to guidelines or use the wrong shop form.
Always review the paperwork every time even if you feel you can do
the shop with your eyes closed!

You would think that the above three items would be obvious things
to avoid, but I see these errors every day when I review my coaching
clients' reports, and hear about them from schedulers and mystery
shopping companies. Sure mystery shopping is fun, but it's work
that you are getting paid for (if you do your jobs properly). One
of the best ways to become a top earning mystery shopper is to take
your work seriously and always conduct yourself as a professional.
Quality work gets noticed and opens many doors. The more doors you
open, the more money you make--simple, but true!

This was the final installment of “Things You’re Doing Wrong In Your
Mystery Shopping Work”—I hope you enjoyed it and found the tips helpful.
Next post--more "Ask The Coach"!

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com/

Copyright 2005 Melanie R. Jordan E-Publishing

Things You're Doing Wrong In Your Mystery Shopping Work: Part II

Missing Deadlines/Giving Up On Targets

Schedulers and mystery shopping companies depend on you to get the
job done in a quality manner, on time. If you can't deliver, they
don't need you!

A common complaint I hear from schedulers is that in the case of a
shop with a specific target employee, as is typical with apartment or
financial services shops, many shoppers do not give the scheduler
the courtesy of notifying them when they are having trouble reaching
that target and often just give up. The scheduler then doesn't find out
that the assignment is incomplete until they follow-up and then it's
usually too late. You don't get paid, and neither does the scheduler,
so do you think you're going to get work from them again?

For more articles like this, check out the following URL: http://www.mysteryshoppercoach.com/Articles.html.

This is part two of this piece, look for more things you’re doing wrong in your mystery shopping work in part three, the final installment coming in the next post.

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com

Copyright 2005 Melanie R. Jordan E-Publishing

Things You're Doing Wrong In Your Mystery Shopping Work: Part I

Sloppy Reporting

You are your report in the eyes of the mystery shopping company you are working with and their client. So make sure your report, even if it is a simple one with only some minor commentary here and there, is of the highest quality.

Common errors in reporting include: misspellings, horrible grammar, failure to use complete sentences, lack of synonyms, speed errors (checking off "yes" when it is obvious you meant to say "no" from your comments in the report) and starting off every sentence in the same way (i.e. "he said", or "I").

For more articles like this, check out the following URL: http://www.mysteryshoppercoach.com/Articles.html.

This is part one of this piece, look for more things you’re doing wrong in your mystery shopping work in part two coming in the next post.

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com/

Copyright 2005 Melanie R. Jordan E-Publishing

Mystery Shopping Scams

Priscilla: “Is the industry troubled by scams?”

Coach Melanie: “Unfortunately as a home-based work opportunity, mystery shopping is the target of unscrupulous individuals and companies. However, I would like to stress that there are lots of "real" mystery shopping assignments out there, and the field itself is definitely legitimate.

I caution mystery shoppers to use common sense. If someone asks for money upfront for information on becoming a mystery shopper, or to register to be a shopper, a warning bell should go off in your head. While there are some legitimate services that provide leads for mystery shoppers, asking for upfront money is a tip-off that this might be a scam.

A legitimate company should not ask for personal, sensitive information; they should provide a free sample of their product or service; not hide critical information like their company name; and they should not overpromise benefits derived from their offering. A prospective shopper should be especially concerned when they receive an unsolicited e-mail, phone call or mailed letter, and be cautious with classifieds ads that sound too good to be true. I have a detailed article on this topic on my web site at http://www.mysteryshoppercoach.com/mysteryshopperscams.html.

The above Q & A was from a recent interview by reporter Priscilla Nordyke Roden for my second mystery shopping piece in “The San Bernadino Sun”. The published article called “Ah Sweet Mystery Of Shopping” which appeared on 9/2 had many quotes with yours truly and can be found in the articles section of my web site at http://www.mysteryshoppercoach.com/Articles.html.

This was the final installment of the Q&As in this series. I hope you enjoyed them!

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com

Copyright 2004-5 Melanie R. Jordan E-Publishing

Advice On Breaking Into Mystery Shopping

Priscilla: “What advice do you give to people wanting to break into the mystery shopping field?”

Coach Melanie: “Since I was a marketing professional in Corporate America for over 15 years, I tend to have a different point of view than many people out there, but it works.

First, don't waste time applying to any and every mystery shopping company you can find, unless you want to be an underemployed mystery shopper with very sore fingers. For a job search in the regular business world, the shot gun approach of applying en masse to companies when you don't even know if there are job openings, rarely works. It's the same thing with mystery shopping. Just like any other freelancers, mystery shoppers need to learn to generate work for themselves on a regular basis. This is effectively done through networking and marketing of their services through the various job lead boards on Yahoo and Topica, and the middlemen and women of the industry known as schedulers.

Second, do a great job when you are given an assignment, so you'll get asked to do another one. Eventually, you'll become a "go-to" person for many companies and schedulers, and then you'll likely be in the enviable position of having more work than you can handle!”

The above Q & A was from a recent interview by reporter Priscilla Nordyke Roden for my second mystery shopping piece in “The San Bernadino Sun”. The published article called “Ah Sweet Mystery Of Shopping” which appeared on 9/2 had many quotes with yours truly and can be found in the articles section of my web site at http://www.mysteryshoppercoach.com/Articles.html.

Look for Part Four in the next post:

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com

Copyright 2004-5 Melanie R. Jordan E-Publishing

Professionalism And Mystery Shopping

Priscilla: “I understand that shoppers are becoming more "professional," if you will. Why is this so?”

Coach Melanie: “I've always urged the readers of my books and those that I coach to treat mystery shopping as not just a "fun" way to get a freebie on the next trip to the mall. Mystery shopping is actually one form of marketing research; it's important work. The mystery shopper who acts like a professional, is treated like one. That shopper will also be the one who ultimately gets the regular, better-paying work in the field that eludes so many wannabes. By the way, that's not to say it isn't an enjoyable way to supplement your income.

The "professional" aspect has been the focus of some of the organizations devoted to mystery shopping like the National Center For Professional Mystery Shoppers (NCPMS). I know that group's heart is in the right place in attempting to try and create some standards and certification for mystery shoppers. Mystery shoppers should understand that while such a course can't hurt them, it is not a requirement. I've never been "certified". Nor do I intend to be. And I've done just fine.”

The above Q & A was from a recent interview by reporter Priscilla Nordyke Roden for my second mystery shopping piece in “The San Bernadino Sun”. The published article called “Ah Sweet Mystery Of Shopping” which appeared on 9/2 had many quotes with yours truly and can be found in the articles section of my web site at http://www.mysteryshoppercoach.com/Articles.html.

Look for Part Three in the next post:

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan
http://www.mysteryshoppercoach.com


Copyright 2004-5 Melanie R. Jordan E-Publishing

The Demand For Mystery Shoppers

I recently had the pleasure of being interviewed by reporter Priscilla Nordyke Roden for my second mystery shopping piece in The San Bernadino Sun. The published article called “Ah Sweet Mystery Of Shopping” which appeared on 9/2 had many quotes with yours truly and can be found in the articles section of my web site at http://www.mysteryshoppercoach.com/Articles.html.

But I thought you might enjoy and benefit from reading the actual interview pre-publication. Here’s Q&A # 1:

Priscilla: “Is the demand for mystery shoppers likely to continue to be high?”

Coach Melanie: “Absolutely. It's a competitive world out there, and businesses of all types and sizes need objective mystery shoppers to be their eyes and ears in the field. Companies who want to survive and thrive need to do ongoing research into their customers' experiences to ensure a positive business relationship, discover missed sales opportunities, and to gain an edge over competitors.”

Look for Part Two in the next post:

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan

Copyright 2004-5 Melanie R. Jordan E-Publishing

Happy New Year! Mystery Shopping & Your Life

Hello Everyone--

Well it's a new year and another chance to get your life right. Many people ask me how I got into mystery shopping and merchandising. For me, it's simply one way of bringing in some money that helps me keep a flexible schedule and keep afloat financially. This way, I can devote time to my true passions of writing and publishing on subjects that I have expertise in, and that matter to me.

When you're self-employed, it's important to have many income streams that ultimately let you create the lifestyle you seek. So whatever your reasons are for doing mystery shopping and/or merchandising, it may help supplement your income today, but most importantly, let it be even one small component that gets you on your way to your life's purpose. Think about it.

Have a great day and happy shopping!

“Taking the mystery out of professional mystery shopping”—Melanie Jordan http://www.mysteryshoppercoach.com

Copyright 2005 Melanie R. Jordan E-Publishing