Gift Card

Wow, thanks for this great explanation you have..

Hello, allen25glenn. 

I'm happy that my colleagues were able to help and explain it further to you. We in the Community are always here to assist you anytime if you need additional assistance.   

To further guide you in managing the growth of your business and sales transactions using QBO, I'd recommend checking out this article: QuickBooks Help Articles. It includes topics about account management, managing customers and income, and banking, to name a few. 

Loop me in anytime here if you need another help or anything related to QuickBooks. Take care!

Adding on to this, how do you buy something from the vendor and include a cc payment for the expense that goes beyond the gift card amount. If I buy $100 worth of product and have a $45 gift card how do I add the $55 payment to the same transaction? 

Hi bluemusic1,

You'll want to record the purchase as a bill, so you can pay for it twice. The first payment is by credit card, and the second payment is by applying the gift card.

If the gift card was given to you for free and it is currently accounted for as Other Current Assets in your books, you need to do a barter transaction to transfer the amount to A/P or to a barter account. This step turns it into vendor credits, which can be applied as a payment to the bill.

First, set up the barter bank account:

1. Go to Settings ⚙ then select Chart of accounts.
2. Select New to create a new account.
3. Under the Account Type ▼ dropdown, select Bank.
4. Under the Detail Type ▼ dropdown, select Cash on hand.
5. Enter the account name. (ex. Barter Bank Account)
6. Select Save and Close.

Second, move funds from Other Current Assets to the barter account:

1. Click +New and select Journal Entry.
2. First line: Select the Other Current Asset account and put $45 in the DEBIT field.
3. Second line: Choose the barter account and put $45 in the CREDIT field.
4. Click Save and close.

Third, applying the gift card as a second payment:

1. Open the bill and click Mark as paid.
2. In the Bank/Credit account field at the top, select the barter account.
3. Enter $45 in the Amount field on the next page.
4. Click Save and close.

You can always go back to this thread if you have more concerns. Take care and have a good one!

Thanks for your response. This was a gift card received for a return. I returned a product to the store, they gave me a gift card instead of money back. I used this to pay for a later purchase, partially with credit card. So, in this case I will create a bill and pay it with both payment methods. 

How would I record a return with gift cards? Let's say i returned the $100 product. The vendor will give me $45 back in gift cards and $55 back on my credit card. Now I want to record a credit card credit but what is the correct way to do that? 

Thanks for getting back to this thread, @bluemusic1. Let me chime in and provide some insights about recording returns with gift cards.

We can create a Credit Card Credit in QuickBooks Online to handle returns with gift card transactions. 

1. Click the +New button and choose Credit card credit.
2. Select the vendor.
3. In the Bank/Credit account field, select the credit card account you received the refund.
4. Choose the date in the Payment date section.
5. In the Category details section, select the same expense account as your original purchase.
6. Input the amount.
7. Lastly, click Save and close.

When you start using the gift card for purchases, proceed to create an expense and attach the $45 amount. For detailed steps, please check out this article: Enter and manage expenses in QuickBooks Online.

Additionally, I'll be sharing these links you can utilize to help manage supplier transactions in QuickBooks:

• Enter bills and record bill payments in QuickBooks Online
• View supplier transactions

Feel free to comment below if you have further questions about recording returns with gift cards. I'll be happy to help you. Stay safe

I see that the instructions listed are for entering a credit card credit. I wasn't clear with my question. My question is about using a credit card credit in conjunction with a gift card that is given instead of part of the money in the same transaction. I return $100 item, get $45 in gift cards back and $55 back on my credit card. I am not clear where to put the $45 in gift card dollars.  In step 6 you say to input the amount, which I assume is only the amount that is returned to the credit card, in this example, $55. So my question is what to do with the $45? 

Hi @bluemusic1.

In your case, I suggest creating a new bank account to put the $45 and name it Gift Card.

This way, you can create a credit card credit with the item's exact $100 and negate it with a $45 gift card. I also suggest consulting your accountant to ensure the amounts are accounted for accurately.

Here's how:

1. Click the Gear icon on the top right.
2. Choose Chart of accounts.
3. Hit New.
4. Select bank and then enter the details like, for the Tax Form Section/Detail Type, select Cash On Hand and account name Gift Card.
5. Hit Save.

Once done, create a credit card credit. Under Category details, select the Gift Card account and enter the -$45 amount. Then in the Item details section, select the returned product and enter $100 as the amount.

Then you can use the Gift Card account for your future purchase.

You can reference these articles for more details:

• Handle supplier credits and refunds in QuickBooks Online
• Enter a refund from a supplier

Let me know if you need more assistance with tracking refunds and expenses. We're always here to help. Stay safe and more power to your business!

Thank you for your clear response. I understand the first part. However, this is not a product on my inventory. This is a product I bought from a vendor. When you indicate tumbler under Item details, does that mean I should add a new product to my products and services list every time I return something? Seems a bit cumbersome. Can't I add the expense account to the category field and on line two put gift cards to offset the total? 

Hello, bluemusic1. 

Yes, you're right. We need to add a new product in the product and services list so you can categorize it to the correct account and help you ensure your book is accurate. 

For more details and how to use and manahe your expenses, please refer to ths article: Enter and manage expenses in QuickBooks Online. 

Also, to further guide you in managing the growth of your business and sales transactions using QBO, I'd recommend checking out this article: QuickBooks Help Articles. It includes topics about account management, managing customers and income, and banking, to name a few.

If you have follow-up questions or concerns, please let me know. I'll be happy to answer them for you. Take care and stay safe.

This is a great explanation! I got my gift card for free and applied it to an Amazon purchase. How do I best record this? Because the gift card was free I don't think I can record it the same way. 

It's nice to see you here in the Community, @acadofdiplomacy. I'll help you record the gift card into your QuickBooks account.

Since the gift card is free, you can create a wash account to move money from one account to another. This account normally has a balance of $0.00 because you always take out the same amount that you put in. 

However, I would also encourage you to consult with your accountant when doing so. They can further guide you on the appropriate accounts to use in recording the gift card to keep your books updated.

Here's how:

1. Go to the Accounting menu.
2. Select Chart of Accounts.
3. On the Chart of Accounts page, click the New button.
4. Choose Bank Accounts in the Save account field.
5. Enter the account name. (ex. Barter Bank Account or Wash account)
6. Enter all other necessary details required. But make sure not to enter an opening balance.
7. Click Save.

For more details, see this article: Set up a clearing account. This is a US article, but it still works the same with your QuickBooks account.

Once you're done, you can use the clearing account when creating journal entries. Then, link them when you enter a receive payment transaction to zero out in case there's an overpayment.

Stay in touch if you need further assistance while working in QBO. Please know I’m always here ready to help and make sure you’re taken care of. Enjoy the rest of the day.