This excerpt taken from the BBY 10-K filed May 10, 2006.
Accounting for Points and Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products or Services to Be Delivered in the Future. The value of points earned by our loyalty program members is included in accrued liabilities and recorded as a reduction in revenue at the time the points are earned, based on the retail value of points that are projected to be redeemed. Loyalty program membership fees are initially deferred and then recognized in revenue ratably over the membership period.
$ in millions, except per share amounts