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:
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:
If the user syncs sales receipts and the user pays by gift card, how does it look?
The gift card looks like a discount:
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: