Issuing gift certiifcate without selling it first

not sure if this is good practice from an accounting perspective - but why not sell the voucher/gift certificate at 100% discount, so its generated, but you dont take any monies for it. That way it will be redeemable when the customer uses it.

Hi Bill, here's some thoughts, keep in mind they're just suggestions, I have not implemented or tested these - there's two approaches - track it as a discount or as a tender type

- As a discount you can create a discount reason code "gift voucher" and when you manually reduce the price of an item by $100 you select that reason code; downside is that reason code is selectable whether client is using the gift voucher or not (this can lead to fraudulent discounts)

- As a tender you'll use the voucher tender the way the system intended it'd be used but you need to account for the value you load onto that voucher ($100 per voucher; this is a liability that must be accounted for). couple of options to account for the value

1) create a tagalong item with a price of -100 and assign to the gift voucher, so when gift voucher is "sold" the tagalong will cancel the value on the receipt, (consider making these not discountable, qty entry at pos not allowed, etc (options tab) or

2) account for the $100 using a misc tender or a house account - this last option also opens you up to fraudulent activity, but a 100% safe approach doesn't come to mind - I'm fairly new to RMS someone more experienced may post a better approach - hope this helps

The first approach is probably the easiest to setup and monitor - you can always flag the gift voucher and tagalong offset to "block sales" when you've given away all these gift vouchers to minimized fraudulent activity....I'm fairly new to RMS someone more experienced may post a better approach - hope this helps

"Bill Yater" wrote:

Hi Bill,

RMS has the following tender types:

tenderOther = 0 tenderCash = 1 tenderCheck = 2 tenderCreditCard = 3 TenderAccount = 4 tenderFoodStamp = 6 tenderECCashCard = 7 tenderVoucher = 8 tenderDebitCard = 9

In your situation, the "$100 gift certificate" now effectively becomes a discount coupon, which is a form of promotional offer and entitles the bearer free gifts, similar to a discount on purchase or zero purchase. A discount coupon often does not have a serial number. It is a sales expense on the balance sheet. Tender type "Other" is probably the closest you can get.

So back to your question: Is there a way that a store manager can issue a gift certificate to a customer without actually selling it? Technically, if you give out any redeemable coupon (w/o selling it), it may be viewed as a discount.

Sale of Gift Card, Gift Voucher, or Gift Certificate becomes unearned income; a liability on the balance sheet waiting to be redeemed. It is only when the GC is redeemed is a sale realized or when it expires, in which case you would need to book it as misc. income rather than income from sale.

GC usually has a serial number or reference number on it for internal tracking purposes because companies need to know how much liability or worth of the gift cards they need to honor. I would assume your store policy should only allow generation/sale of a valid serial number when a payment is received from the customer.

I would be more concerned about the actual effect to the books rather than how you call your "gift certificate". Accounting principles should always be your guidance when selecting the correct tender type.