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Level 1

How do I record the return of an item that was purchased with a credit card, but was given store credit for the refunded money.

We purchased an item from Home Depot with a credit card.  We later returned the item and Home Depot refunded the money with an in store credit/gift card.  I also need to record items purchased with this gift card.

Solved
Best answer 10-15-2018

Accepted Solutions
ProAdvisor

You will need to use "Credit Card Credit" (create + sign...

You will need to use "Credit Card Credit" (create + sign > Vendors > Credit Card Credit) as designated form in QBO, to handle return with gift card transaction.

  • Select Vendor = Home Depot
  • Add New Home Depot Gift Card (as Credit Card type) > notice once added new balance should show zero
  • Account = same account originally used when entered for purchased items
  • Amount = gift card store credit amount
  • Save > notice once saved balance should show negative amount equivalent to store credit
  • Save and Close

When you start using the Gift Card for purchases, go to Expense Form  (create + sign > Vendors > Expense) and select Home Depot Gift Card from drop down list and use it as a form of payment.


Once you start using negative balance should go down.

View solution in original post

5 Comments
ProAdvisor

You will need to use "Credit Card Credit" (create + sign...

You will need to use "Credit Card Credit" (create + sign > Vendors > Credit Card Credit) as designated form in QBO, to handle return with gift card transaction.

  • Select Vendor = Home Depot
  • Add New Home Depot Gift Card (as Credit Card type) > notice once added new balance should show zero
  • Account = same account originally used when entered for purchased items
  • Amount = gift card store credit amount
  • Save > notice once saved balance should show negative amount equivalent to store credit
  • Save and Close

When you start using the Gift Card for purchases, go to Expense Form  (create + sign > Vendors > Expense) and select Home Depot Gift Card from drop down list and use it as a form of payment.


Once you start using negative balance should go down.

View solution in original post

Level 1

Could you this be explain to someone who is not an accoun...

Could you this be explain to someone who is not an accountant? Beginner.
Level 1

wait...2 problems for me. I am a Contractor and actually...

wait...2 problems for me. I am a Contractor and actually have a Home Depot credit to merchandise card. I do have merchandise card set up as a credit card in chart of accounts. I entered the return in CCC as you explained and saved. In the vendor register, it does not show a negative number after saving, although it does say Credit Card Credit. When I create a new expense, add Vendor and choose the merchandise credit card, I can see previous credit card credits and deposits in the window on the right, BUT NOT THE ONE I JUST ENTERED? Wondering why? Help
Level 1

I did this and used my gift card account to pay the vendo...

I did this and used my gift card account to pay the vendor that account went down but the vendor account just shows the orignal amount of credit credit card Ex=$100.00 (was never a  negative # (-$100.00) in vendor tranactions
Level 3

Store credit / gift cards are best treated as their own b...

Store credit / gift cards are best treated as their own bank or credit card account (or cash account).  This case of a return is special, in that you need to enter a transaction for the opening balance that is basically a deposit (if you use a bank account) or a credit (if you prefer the interface for a credit card) - and which reverses the expense of the originally charged item.  E.g., if the returned item was for expense account "Tools", then the deposit would refer to "Tools" and the memo list the returned item (perhaps even attach a copy of the receipt as an attachment).

Then, just enter purchases against the balance as electronic checks (e.g.) if you used a bank account, or as a charge if you called the gift card/store credit a 'credit card' account.

Because gift cards / store credits can only be used at specific stores, it is best to create a different account for each store involved in order to track them.  My view anyway.

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