How do I record donated gift certificates that are raffled off and redeemed by someone else?

I'm here to help you track these transactions in QuickBooks, JBaker18.

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

First off, let's record the donation by creating a deposit. 

Then, 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.

Additionally, I've added an article that'll help you learn more about managing gift certificates: Sell and Redeem Gift Cards or Certificates in QuickBooks Online.

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

@JBaker18 

@CharleneMaeF's advice is incorrect.  You do not record an expense when you donate a gift certificate because you have not incurred any expense.  There is no entry to be made when a gift certificate is donated.  You record the expense when/if it is redeemed.  If the winner redeems it for merchandise, a $0 sale will record your expense as COGS for the item(s).  If it's a service, your costs incurred to pay your employees, equipment, etc. are your expenses.