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userbeveragesunlimit
Level 2

Gift Card Purchases

I read how to sell and redeem gift cards.  When you sell a gift card it states to create a new Sales receipt.  However, when I create the Sales receipt they haven't necessarily paid for it yet so I can't enter the payment method.  

 

For example, customer calls and requests a $25 gift card to be delivered later that week along with other products they are purchasing (and having delivered) with payment made shortly thereafter.  I'm assuming I don't want to add the gift card to the same invoice with the other products as it states I should create a Sales receipt. But I need to get some kind of bill to them showing they owe for the $25 gift card.

 

How do I handle this?  Do I create a Sales receipt to give to them but don't enter a payment method until the customer actually provides payment for it?  

 

       

Solved
Best answer February 20, 2021

Best Answers
Charies_M
Moderator

Gift Card Purchases

I appreciate you coming back with clarifications to your concern, userbeveragesunlimit.

 

Since the gift cards are not necessarily paid, you can write an invoice instead of a Sales Receipt. When you receive the payment, you can just simply record a Receive payment.

 

Here's how to create an invoice:

  1. Go to the +New icon.
  2. Choose Invoice.
  3. Fill in the necessary information.
  4. Click Save and close.


For steps on how to receive a payment, visit this article: Record invoice payments in QuickBooks Online.
 

You may also want to check out these articles to learn more about recording and redeeming gift certificates in QuickBooks Online:

Keep in touch for additional questions about gift card purchases or other concerns. I'm here to answer them for you. Have a good one.

View solution in original post

7 Comments 7
MichelleBh
QuickBooks Team

Gift Card Purchases

Hi there, @userbeveragesunlimit.

 

I appreciate you for providing detailed information and for reading some articles about redeeming gift cards in QuickBooks Online (QBO). I'm here to help you handle the customer gift cards in your account. 

 

If the customer purchases the Gift Card (GC) from your company, then you'll need to create a Sales Receipt. You can leave the Payment method blank until your customer paid it. 

 

Here's how: 

 

  1. Click the Plus (+) icon, then select Sales Receipt.
  2. Select the customer's name.
  3. Choose the account in the Deposit to drop-down. 
  4. Pick a Gift Card from the Product/Service drop-down.
  5. Enter the amount.
  6. Tap Save and close.

 

Then when the customer uses this GC when they purchased an item, you'll need to create an invoice. But before that, let's set up a liability account named GC. Let me show you how: 

 

  1. Go to Chart of Accounts, then click New.
  2. In the Account Type drop-down, select Other Current Liabilities.
  3. In the Detail Type, choose Trust Accounts - Liabilities.
  4. Enter GC Issued in the Name field.
  5. Tap Save and Close.

 

Then, create a service item that should link to the liability account. Let me guide you how.

 

  1. Click the Gear icon, then select Products and Services.
  2. Select New and choose Service.
  3. Enter Gift Card in the Name field.
  4. In the Income account drop-down, select Gift cards.
  5. Click Save and close.

 

Once done, create an invoice to redeem the GC. Let me guide you how: 

 

  1. Click the Plus (+) icon, then select Invoice.
  2. Choose the customer's name. 
  3. On the first line Item being bought, then enter the amount.
  4. On the second line, pick the Gift Card (the one linking to a liability account), and type a negative amount.
  5. Tap Save and close.

 

Last is to create a Credit memo to give credit GC balance. To do the task: 

 

  1. Go to the + New, then select Credit memo.
  2. On the first line, enter in the Products/Services being purchased and type negative amount. 
  3. Pick the Product/Service you are using for GC and enter a positive number. 
  4. Hit Save and close

 

For the complete steps, check out this article: Sell and redeem gift cards or certificates in QuickBooks Online.

 

I've also added some pages about handling customer's transactions and other topics. 

 

 

That's it. You can always get back to me if you have follow-up questions. I'm just a comment away. Have a good one.

userbeveragesunlimit
Level 2

Gift Card Purchases

Thank you for the quick response.  This is helpful, but I have a couple more questions:

 

1.  Why does the new service of "Gift Card" have a Sales Tax category of Taxable?  I didn't think gift cards were taxable. 

2.  Is a credit memo necessary if the customer uses the full gift card amount in one purchase?

IamjuViel
QuickBooks Team

Gift Card Purchases

Let me share some information about the taxability of your transactions, @userbeveragesunlimit.

 

Generally, at the time the gift card is purchase, the purchaser and you, as the vendor have no idea what the card will be used for. This makes it impossible to charge sales tax on the purchase of the gift card; no tax is due until that gift is used. Sales tax should only be charged when using the gift card, never when buying it.

 

In addition, the taxability of the gift cards depend on the items purchase using it. This is a state by state and sometimes a county by county decision. Food is frequently not taxed depending on a number of factors including how it is prepared, served, and consumed. I'd recommend consulting with an accountant or a tax professional so you'd be guided in determining whether the items you sell are taxable or not.

 

On the other hand, I'm adding these articles to learn more about maximizing the use of the sales tax center in QuickBooks:

Get back to us here if you have other questions or comments. I'm always here to lend a hand.

userbeveragesunlimit
Level 2

Gift Card Purchases

Thanks for the information regarding the taxability of gift cards.  But, can you also respond to the second question about whether the issuance of a credit memo is required IF the purchaser uses the entire gift card for one purchase?

MariaSoledadG
QuickBooks Team

Gift Card Purchases

Let me provide you a few information about Gift Cards (GC), userbeveragesunlimit.

 

It's not really required to use a credit memo for the entire gift card purchase. You'll want to add the gift card in your invoice with a negative value to zero out the payable or use a Credit Memo to record the GC credit. I've attached a screenshot of how you can add it to an invoice:

 

To use a credit memo, you'll have to turn on the feature first, then create a credit memo to apply it to an invoice.

 

For your reference, please check out these helpful articles for more information.

 

Reply to a comment below if you need anything else about the gift certificate. As always, I'll be few clicks away in case you need further assistance.

userbeveragesunlimit
Level 2

Gift Card Purchases

Sorry, me again.  I did a trial run of the Sales Receipt without selecting a payment method, as I explained our gift cards are not necessarily paid by the customer prior to actually receiving it.  When I did not select a payment method the Sales Receipt shows an "Amount received", like $25, yet we haven't received any payment yet. 

 

But, I get it.  This a receipt as if the product has already been paid for.  Most companies probably do get the payment before distributing the card.  Unfortunately, that is not always the case for our company. 

 

I'm assuming that there is no other way to record a gift card purchase other than doing a Sales Receipt, correct?  If not, we will just need to make it work somehow for our company.

 

Thank you.

Charies_M
Moderator

Gift Card Purchases

I appreciate you coming back with clarifications to your concern, userbeveragesunlimit.

 

Since the gift cards are not necessarily paid, you can write an invoice instead of a Sales Receipt. When you receive the payment, you can just simply record a Receive payment.

 

Here's how to create an invoice:

  1. Go to the +New icon.
  2. Choose Invoice.
  3. Fill in the necessary information.
  4. Click Save and close.


For steps on how to receive a payment, visit this article: Record invoice payments in QuickBooks Online.
 

You may also want to check out these articles to learn more about recording and redeeming gift certificates in QuickBooks Online:

Keep in touch for additional questions about gift card purchases or other concerns. I'm here to answer them for you. Have a good one.

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