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.