How to enter sold and redeemed gift cards

Hi there, @ndsue21. 

Thanks for choosing QuickBooks for your business. I'm delighted to help you record the sales and redemption of the gift cards when customers use them to purchase.

First off, you'll need to create a liability account called "Gift cards". Then, create a service item using the same account selected as the income account named gift card. With this, you can track the amount in that account.

After that, create a non-inventory type item called advertising expense and link it to the advertising expense account. 

To issue a gift card, create a sales receipt to record the sold gift card for the customer. Here's how:

1. Go to the Customers menu.
2. Select Enter Sales Receipts.
3. Fill in the customer's info, including the Date and Sales No.
4. Line one, Gift card item, quantity, and amount. 
5. Click Save & Close.

Then, create an invoice for the redeemed Gift card. Here's how:

1. In the Customers menu.
2. Select Create Invoices.
3. Fill the fields with the customer's info like the Date Invoice #, Bill to/Sold to, and Terms.
4. List the sold item on the first line. Then enter the gift card item on the second line with a negative amount.
5. Select Save & Close.

Also, you can consult an accountant for some guidance on what account to use for the item.

Once done, you can create a sales receipt to record the sold gift card for the customer. Here's how:

1. Go to the Customers menu, and then select Enter Sales Receipts.
2. Fill in the customer's info, including the Date and Sales No.
3. Line one, Gift cards item, quantity, then amount.
4. Click Save & Close.

Then you can create an invoice for the redeemed Gift card. Here's how:

1. In the Customers menu, select Create Invoices.
2. Fill the fields with the customer's info like the Date Invoice #, Bill to/Sold to, and Terms.
3. List the sold item on the first line. Then enter the gift card item on the second line with a negative amount.
4. Select Save & Close.

I've also attached an article to help you with the steps on running customize the financial report for your future reference: Customize company and financial reports. 

I'm always around here if you need further help with recording transactions in QuickBooks. Take care!

Hi ndsue21,

Hope you’re doing great. I wanted to see how everything is going about recording the sold and redeemed gift cards you had yesterday. 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!

talk to your accountant of course, but here is how i track my gift certificates in a very simple way

we use a single customer per register Register1 to track sales at end of the day.

we have an Other Current Liability account Gift Certificates Outstanding

we created an item of type other charge Non Tax (its liability not a sale) which uses the Gift Certificates Outstanding account.

In daily practice here is how we record the gift certificate sale :

1) create sales receipt for customer Register 1

2) add a line item Gift Certificate and the associated QTY, RATE and/or AMOUNT.

3) save & close

this adds to the liability account Gift Certificates Outstanding

then to REDEEM a gift certificate:

1) create a CREDIT MEMO for our customer Register 1

2) add a line item Gift Certificate and the associated QTY, RATE and/or AMOUNT. being redeemed

3) save & close NOTE: no money change hands in this operation. its an accounting action only. the money is in the bank from when the Gift Certificate was purchased.

4) and also use credit to give refund (click <enter>)

5) issue the refund in the next popup. (accept defaults, click <enter>)

NOTE: I blanked out my bank account info :)

Check your liability account and it will have decreased accordingly.

I have another query relating to gift cards. We are a non profit and there are two types of transactions we regularly encounter.

1. Private donors will sometimes give us gift cards to use to support the programs we run. So in this case, we didn't spend any money on them but we will use these GC's to buy groceries for the Food Bank. How would we enter GC's that are donated from a third party?

2. We also purchase Gift Cards to give to program participants when we have to close the Food Bank for a week. This way they can go and buy groceries themselves. So how would we enter this? And let's say we purchased 400 GC's but only gave away 370 of those GC's and decided to use the 30 leftover GC's to purchase food for our programs. How would this get accounted for?

Thanks for any help you can provide.