How should I handle gift cards in QuickBooks Desktop?

Introduction

  • When you sell a gift card it is not considered income until you have provided the product or service that the gift card redeems.
  • The sale of a gift card it is considered a liability in QuickBooks.
  • Once the gift card is redeemed it adds to your income account and removes the gift card from the liability account in QuickBooks.

How does Connex handle gift cards/gift certificates?

If a gift card is purchased, then it will appear as a non-inventory part with a positive amount on the QuickBooks invoice or sales receipt. If the gift card is used, then the gift card appears as a discount. Non-inventory parts in QuickBooks allow negative amounts.

Connex will map all gift cards to an item called giftcard. This item should be of type non-inventory and its income account it set to a liability. 

Here is an example from QuickBooks Desktop:

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If a user purchases a gift card for later use, how does it look?

The product giftcard will appear as a line item. Here is a $25 purchase:

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If the user syncs sales receipts and the user pays by gift card, how does it look?

The gift card looks like a discount:

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If the user syncs invoices, how does it look?

In this case, the gift card is a payment method on a payment. The payment total equals the gift card total.

How does it look in my balance sheet?

Here is an example report:

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