How to Post Gift Certificates

"Lynne Lepage" wrote

The printing of gift certificates does not give rise to any income or expense (save for the printing cost).

When a gift certificate is sold, it's like a pre-payment on an account. It's nothing more than a customer giving you $25 to hold till they come buy what it is they want at some later date. The net entry would be to debit cash and credit a liability called something like "gift certificates redeemable". You should be able to set the account up as a liability, so when someone buys the gift card, the sale gets recorded into the liability account.

The sale is rung up as any other sale is. The payment is in the form of a gift card might be tricky. Instead of recording cash or charge, record it as a gift card. Most modern registers can account for this in some manner. All it does accounting wise is reduce the liability (you've already received the cash).

The Gift Certificates were never posted in the Accounting Software because they were printed for "Give Aways" as a Promotions.

We already invoiced the customer for $56.50. The GST and PST taxes were paid by a Credit Card. So the remaining balance of $50.00 is still owed to us, so how do I process the Gift Certificates that the customer brought in to cover the remaining balance of $50.00?

Lynne

"Lynne Lepage" wrote

Not unsimilar to how you would post a discount, coupon, etc.

You could record the full sale and show the gift certificate as a contra revenue account (most likely how it's going to happen). The cash isn't touched. Credit Sales for the $50. Debit a "Gift Certificate Promotions" account for the $50.

There are ways to set all this up in the software, as well as in the registers (if you have one that's more than $100.)

Thanks I use Simply Accounting 2008. In the Receipt Module, how would I process the payment (no cash value)

How do I post it so it shows that the Customer account has been paid.

Lynne

"Lynne Lepage" wrote

You have to set the system up to show the "receipt" - not of cash or check - but of the coupon or discount. It will be a debit to an expense or contra revenue account.

Part of your "deposit" of his payment would not be to the bank, but to that account. So in set-up where you establish the bank accounts to deposit to, you set up this discount, coupon, etc account.

So let's make this a little easier to understand.

The sale is for $100 and the customer pays with a $20 off coupon. You record the sale at $100, show $80 going to the bank and $20 going to the discount. coupon, etc account.

Here you have a sale of $50 with all the payment going to the discount/coupon account.

Sale: CR $50 Coupons: DR $50

That's what your end result should look like.