If you do Supermarket (or any other shop) as a "Mystery shopper" you may consider the "compensation" the MSC pays as a discount on your grocery order but you have to be going to the location to do your "personal shopping" to justify the effort and expense of gas.unless you are being paid properly for your time and out of pocket expenses.
The supermarkets in my neck of the woods have been paying $7.50 for the past 10 years. You could get two bags of food tor $7.50. Ten years later, this year, you are lucky if you fill one bag for $7.50.. I am there anyway, may as well get the bag of food. or my shop would be invalidated.
The supermarket does not pay you in money, you must shop and buy $7.50 , which costs the MSC about $5.00 for the report.. You may do the shop if you were going shopping. The extra bag of food cost you nothing but the time it takes to ask a few questions and do a report.
Do not try to put this on your list of shops. The bag of food, according to an IRS auditor, is "tools" the MSC requires you buy as the shop would be invalidated if you did not buy those items. Other auditors may consider it "compensation". and he may have also If the supermarket did not require that you buy the food to evaluate the cashier and just paid you the $7.50 fee you can spend the $7.50 anywhere, it would be a shop that had to be reported. because you were paid $7.50.
The auditor said I had a business as other shops offered fees and I incurred legitimate expenses. Another auditor may have the OPINION that I had a "hobby" and my expenses did not justify the criteria for a real business, it was only a "HOBBY" Those "judgment calls" are up to the individual auditor reviewing the case.
You can not have a business loss year after year and take the expenses as losses.
You said "Shoppers were paid around $14 per hour and taxes were taken out from that. So I was lucky to make $1,000 a month as a part-time (18-22 hour) employee, or slightly more when I volunteered for distant stores to paid my mileage reimbursements."
Divide your alleged hourly wage. of $1000 a month by 18 or 22 hours. If you worked $18 hours at $14 an hour you should have been paid $252 before taxes. If you worked 22 hours at $14 hours you would have been paid $308 for 22 hours. NOT $1,000.
This is why clients take advantage of mystery shoppers. Mystery shoppers can not get a calculator out and figure the real compensation for the job or the value of their time and other expense.
If you are passing a convenience store on your way to the beach and stop in for a sandwich that will be paid by the MSC and you will also be paid a fee (which will pay for your gas) you were going to the beach anyway so you can stop and get your sandwich and beverage and use the fee for gas. You must declare that FEE/ INCOME but not the sandwich as the shop would have been invalidated if I did not purchase the sandwich, it was a "tool" I must buy. It is like bending over and finding a $10 or $20 bill on the sidewalk. Instead of.doing a crossword puzzle at the beach while you lay under the umbrella do the report. it pays better than crossword puzzles.
Is this a business or a Hobby? You did not pay to go to the beach, an MSC paid you to go to the beach. You got your money still in your wallet when the MSC reimburses you and pays you the fee (and if you are sharp you may ask the MSC for a little money for gas. That is an expense but mileage only to the convenience store, NOT to the beach.
Of course I do other shops but Mystery Shopping is a business. You did not make $1000 for 18 or 22 hours as an employee. Being part time you probably did not get any benefits as grocery stores work employees part time to avoid paying benefits except for full time managers and office employees. .
You can have everything in life you want if you will just help enough other people get what they want ..Zig Zigler