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Booklady317
Level 1

Gift certificate sale and redemption

Could someone please clarify all the aspects of a gift certificate sale and redemption. I understand the sale is a current liability. What I am struggling with is the redemption recording. I created a payment type GIFT CERTIFICATE. The problem is, when I use it QB creates a deposit to be recorded that doesn't really exist. How do I credit CASH without a deposit. Our daily sales receipt is all the sales (inventory/gift certificates) and all the payments/gift certificates redeemed on a single sales receipt. There is no way to break them out (or the will to do that!) What I need is directions on how to set up the GC items for sale and redemption (if they are not in fact the same item) that actually reduces the liability and credits cash without the need for a deposit with cash we don't actually have on hand.

2 Comments 2
Charies_M
Moderator

Gift certificate sale and redemption

Hi there, Booklady317.

 

I'm here to guide you on how to handle Gift certificate sales and redemption in QuickBooks Desktop (QBDT).

 

The first step is to set up a liability account. By the time you purchased gift certificates, credit the liability account since you owe the customer the value of the gift card.

 

To create a liability account:

  1. From the Lists menu, choose Chart of Accounts.
  2. Press Ctrl +N.
  3. Click the Other Account Types drop list.
  4. Choose Other Current Liability.
  5. Select Continue.
  6. Name the account like a bank account.
  7. Click Save & Close.

When you sell gift cards, you'll want to make sure that you create a liability account for the item. This way, QuickBooks will automatically credit the liability account once you created a sales receipt when someone purchased the GC.

 

Also, you must enter a negative amount for the GC when creating the sales receipt so the balance on your liability account will decrease. 

 

Here's how to associate the account with an item:

  1. Go to the Lists menu, then select Item List.
  2. Find the GC item and double-click to open.
  3. Verify the account associated. Make sure it is a liability account.

When it's redeemed, you can use the gift certificate payment type that you've already created. This will credit the sales and debit the gift cards, which results in reducing the liability. 

 

For tips and related articles in the future about the "How Do I" steps in QuickBooks Desktop, visit our QuickBooks Community help website for reference.

 

Reach out to me with whatever questions you may have about QuickBooks. I’m more than happy to assist further. Have a good one.

Charies_M
Moderator

Gift certificate sale and redemption

Hi, Booklady317.


Hope you’re doing great. I wanted to see how everything is going about recording gift certificates and redemption. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at any time.


Looking forward to your reply. Have a pleasant day ahead!

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