Gift Certificates are different than Gift Cards.
Gift Certificates are best handled via one of the two methods described below. Choose one method or the other depending on how the sales information should be handled.
Gift Certificates as Inventory Items
One way to handle Gift Certificates is to set them up as Inventory items. Start by creating an Inventory database record to represent Gift Certificates. This Inventory record can be used on Sales Transactions both when selling a Gift Certificate and when a Customer redeems a Gift Certificate.
The Gift Certificate Inventory record should be marked as a Service item to eliminate unnecessary Out of Stock warnings. The Price can be left at zero so that when a Gift Certificate is sold, the Clerk is automatically prompted to enter the Price. Since sales tax is typically not charged on Gift Certificates when they are sold, a Non-Taxable Tax Code should be assigned to the Gift Certificate Inventory record. The Gift Certificate Number Tracking feature may be used to track consecutive certificate numbers.
To sell a Gift Certificate, enter the Gift Certificate line item and specify the amount of the Certificate in the Price field. Redeeming a Gift Certificate is just like entering a Return. Enter the Gift Certificate item with a Quantity of negative one (-1) with the appropriate Price. On the same transaction, enter the line items which are being purchased. The Invoice Subtotal will reflect the difference between items being purchased and the Gift Certificate Amount (negative). If the Invoice Subtotal is a positive amount (Customer still owes money), tender the appropriate payment amount the same as on any other sale. Depending on store policy, do one of several things if it is a negative amount:
- Inform the Customer that there is an unused balance, and that they may want to select additional items to use up their Gift Certificate. If they choose to do so, save the transaction as an On Hold until they return to the point of sale with additional items.
- Issue a new Gift Certificate for the difference (enter the new Gift Certificate as a separate line item on the same transaction).
- Give the Customer the difference in house credit using the On Account Payment Type (you must specify a Customer on the transaction to do this).
- Give the Customer the difference in cash by either tendering the Cash Payment Type, or allowing the system to issue Change automatically when the transaction is saved.
Gift Certificates as Payment Types
The other way to handle Gift Certificates is to create a payment type called "Gift Certificate" using Cash or Other as the payment type.
To sell a Gift Certificate, create a new Invoice with no line items on it. Go directly to the Complete Sale screen and enter a Gift Certificate payment as a negative amount. Enter a positive payment for how the Customer is paying for the Gift Certificate (i.e., cash, check, or credit card).
Issue the certificate or use the receipt as the Gift Certificate. When the Gift Certificate is returned, create a new Invoice with the items being purchased and a payment of Gift Certificate.
The Invoice Total reflects the difference between items being purchased and the Gift Certificate Payment Amount. If the Invoice Total is a positive amount (customer still owes money), tender the appropriate payment amount the same as on any other sale. If it is a negative amount, follow store policy regarding Gift Certificates (outlined above).
Note: If using the Accounting Link, be sure to post the "Gift Certificate" payment to a separate (liability) account.
Comparison of the Two Gift Certificate Methods
The Inventory item method allows for certificate number tracking. It also accounts for the sale at the time the Gift Certificate is purchased, while the Payment type method accounts for the sale at the time the Gift Certificate is redeemed. The Inventory item method allows for easier tracking of purchased Gift Certificates and unredeemed Gift Certificates.
Both methods allow for posting Gift Certificate sales to a separate General Ledger account.
Note: Use either one or the other method for issuing Gift Certificates. Do not use both methods. Selling a Gift Certificate as a line item and then redeeming it as a payment will cause inflated and incorrect gross sales figures.
Gift Certificate Number Tracking - how to track Gift Certificate numbers.
Gift Card Entry - entering the Gift Cards and selecting the required action (in Sales Manager).
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