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ds95
Level 1

How do I record a Gift Card (a gift from the company) where no payment was taken?

We issue GC to customers when there are customer service issues, giveaways, donations, etc. No payment is taken here, we are offering this GC as a free gift to a customer. 

 

We need to make an entry when the GC is issued:

DR: Marketing Expense

CR: GC Issued (Liability)

 

When the GC is redeemed:

DR: GC Redeemed (Liability)

CR: ?

 

And what entries need to be made for COG and Sales Tax?

 

Help!

 

Thanks!

9 Comments
Mark_R
QuickBooks Team

How do I record a Gift Card (a gift from the company) where no payment was taken?

Hi there, @ds95.

 

You can record the Gift Card (GC) as sales receipt when issued and invoice when redeemed. I'd be glad to walk you through the process.

 

First off, you'll need to create a liability account named "GC Issued." Here's 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. Click 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 GC Issued.
  5. Click Save and close.

Once done, you can now create a sales receipt for the GC you're going to give to your customers.

 

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

Then, create an invoice for the redeemed GC. Here's how:

 

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

After those steps, you'll be able to record your GC based on your sample entries.

 

Here's an article you can read on for more details: Sell and Redeem Gift Cards or Certificates in QuickBooks Online.

 

In case you need tips and related articles in the future, visit our QuickBooks Community help website for reference: QBO Self-help

 

Don't hesitate to leave a comment below if you have any other questions. We're always here to help.

Rustler
Level 15

How do I record a Gift Card (a gift from the company) where no payment was taken?

@ds95 

 

You know I understand how to do this, and reading the intuit reponse leaves me wondering what the hell they are explaining - not only that but part of it is just wrong.

Create a liability account called gift cards, and create a service item which has that same account selected as the income account named gift card

Create a non inventory type item called advertising expense and link it to the advertising expense account

 

to issue the gift card
create a sales receipt for the customer
line one, gift card item, qty one, amount
line two, advertising expense item, qty -1, same amount (that is a negative one)
save the zero dollar transaction

 

to redeem the gift card
list the items being sold
list the gift card item, qty -1, and the amount (that is a negative one)
the customer pays the balance due if any

Umme
Level 1

How do I record a Gift Card (a gift from the company) where no payment was taken?

While entering Sales Receipt - 

1- I have entered client's name

2- selected Gift Card from product / services

 

but, not able to find Marketing in Deposit To.

 

can someone help..please.

 

Thank you

JamesDuanT
Moderator

How do I record a Gift Card (a gift from the company) where no payment was taken?

Thanks for trying the steps provided above, Umme.

 

You can only select a Bank or Other Current Assets type of accounts in the Deposit to field. Hence, the Marketing expense account is not a choice. Make sure to select the correct account in the Deposit to field so you can see it on your register.

 

You can use this article on how you can record and redeem gift cards: Sell and redeem gift cards or certificates in QuickBooks Online.

 

Your accountant would be a great help about this topic, too. They know the best way to enter the transactions and ensuring that it suits your accounting preference.

 

Feel free to drop by if you have more questions. Have a great day!

barntobewild
Level 1

How do I record a Gift Card (a gift from the company) where no payment was taken?

Thanks Rustler.  Perfect and simple solution.  

hcharles03
Level 1

How do I record a Gift Card (a gift from the company) where no payment was taken?

Good morning,

I am just learning Quickbooks and the issues I am having is with the partner app Receipt Bank that made all the uploaded receipts from all items already paid for travel meals, lodging, flights etc as a bill and I don't know how to fix that. Also I have many items that were all ready paid for such as the items above used with gift card redemption , cash or credit account that were closed. How do I input this into QB? 

BettyJaneB
QuickBooks Team

How do I record a Gift Card (a gift from the company) where no payment was taken?

Hope you're doing great today, @hcharles03.

 

To help determine why the receipts for your items paid are showing as a bill, I recommend contacting Receipt Bank. They'll be able to identify the root cause of this matter, especially with the mapping of the transactions, and provide a fix.

 

On the other hand, when it comes to entering your transactions that was paid through a gift check, you may follow the instructions provided by 

Mark_R or Rustler above. Those are the different ways of tracking entries that were paid using a gift certificate. 

 

To learn more about the process of selling and redeeming gift cards in QuickBooks Online, feel free to check out this link: Learn how to sell and redeem gift cards or certificates in QuickBooks Online.

 

Please let me know if you have any other questions about this or with QuickBooks. I'll be right here for you. Take care!

Momok
Level 1

How do I record a Gift Card (a gift from the company) where no payment was taken?

So far so good, except for the redeeming part, so what happens when the customer redeems the CG by purchasing products from my website? How do I record this? 

BettyJaneB
QuickBooks Team

How do I record a Gift Card (a gift from the company) where no payment was taken?

Good day, @Momok.

 

It's my priority to help you with recording your transactions in QuickBooks Online when a customer redeems a gift certificate by purchasing your product.

 

Once a customer purchased a product from your website or physical store, this is considered a sale. That said, you'll need to create an invoice transaction to track this entry.

 

However, in order to fulfill that obligation and track the transaction in QuickBooks Online, you need to set up a liability account and special items to use on a gift certificate invoice. You can follow the steps shared by Mark_R above on how create them.

 

After that, you can now start generating your customer's invoice. 

 

Here's how:

  1. Click on the +New button.
  2. Select on Invoice.
  3. On the first line, select the Product/Service being bought and fill out the quantity and amount.
  4. On the second line, choose the Product/Service for Gift Certificates (the one linking to a liability account), and enter in a negative number for the amount of the gift certificate.

Your invoice should look like this: gift check.PNG

To give you more insights about this process, you can always scan through this link: Learn how to redeem gift cards or certificates in QuickBooks Online.

 

Know that you can always get back to me anytime if you have any other concerns, @Momok. I'd be happy to assist you. Take care!

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