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How do I record gift cards in Quickbooks?

I have seen this question before but have not been able to apply it to my situation.  I have a POS at my restaurant running Breadcrumb (upserve).  I can sell gift cards at my POS, or Online.  I use Shogo in order to import my daily sales from POS into QB.

When the Gift card is purchased at the POS, I get a credit imported the next day into QB for Sales, and a debit for the payment method (ex: card or cash).  At this point in time Quickbooks has no idea about the gift card, it just sees it as a sale that was not taxed.  Now the customer comes to redeem a portion of the gift card, he purchases a menu item that costs $6.61 and tax $.59, so a total of $7.20.  The next day, we get a credit imported for Sales again (which sounds to me like a duplicate) but also tax will be credited at this time, and a debit for Gift Cards Tender method (if I create a QB account called Gift Cards, currently I don't have one).  What type of account should this be? It can't be a liability because, well its not, I don't owe the $7.20, I'm receiving it.

Now for the online gift cards.  When it is purchased, I receive a payment of the full amount.  If someone purchases a $25 gift card online, I will receive $25 to my bank account.  I record this as an Online gift card purchase (a sub account of Sales).  Now lets say a portion is redeemed like last time, $6.61 sale and $.59 tax.  The POS credits the sale amount and the tax amount (sounds like a duplicate again), and debits Gift Cards again.


So basically its two questions:

1) What type of account should I create Gift Cards as?  Income?

2) Am I handling this properly?  Are sales actually being duplicated or is this correct?

3) Is there anything else I'm missing that I may have overlooked?

My initial assumption is that I'm recording the initial purchase of the gift card incorrectly, and that this should be a liability not a sale.  If I record the initial purchase as a Gift Card Liability, I can then deduct this account with the redemption.  I think that would actually solve it, but since I've wrote this one out, can someone verify?

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Best answer 09-09-2019

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We use a liability account for Gift Cards Payable.  When...

We use a liability account for Gift Cards Payable.  When the gift cards are purchased, instead of crediting revenue, we credit Gift Cards Payable.  It is actually a liability because you owe the customer the value of the gift card.  I have gift cards set up as a payment method so when the card is redeemed, it is a credit to sales and the payment method of Gift Card.  We have other non-cash payment methods here as well, so when we have non-cash sales, on the deposit screen we insert a line below the item and enter the GL account for Gift Cards Payable and a negative amount for the amount of the sale.  That creates a debit to Gift Cards Payable to reduce the liability.  Hope this helps.

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Not applicable

We use a liability account for Gift Cards Payable.  When...

We use a liability account for Gift Cards Payable.  When the gift cards are purchased, instead of crediting revenue, we credit Gift Cards Payable.  It is actually a liability because you owe the customer the value of the gift card.  I have gift cards set up as a payment method so when the card is redeemed, it is a credit to sales and the payment method of Gift Card.  We have other non-cash payment methods here as well, so when we have non-cash sales, on the deposit screen we insert a line below the item and enter the GL account for Gift Cards Payable and a negative amount for the amount of the sale.  That creates a debit to Gift Cards Payable to reduce the liability.  Hope this helps.

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