Sale and redemption of gift cards/vouchers

A gift card (also known as a gift voucher or gift certificate) can be purchased by a customer as a pre-paid money card to use as a method of payment some time later. People often use these types of vouchers as gifts to others.

When a gift voucher is sold and redeemed it needs to be accounted for in a particular way to ensure that revenue is recognized at the appropriate time.

Selling gift cards

Create dedicated products for each value of gift card, with a SKU that matches the gift card code on the sales channel. When an order containing the gift card is downloaded, the SKU will match and the correct gift card product will be added to Brightpearl.

When a gift card is sold the revenue should be recorded as a current liability. The revenue can only be recognized once the gift card is redeemed.

To ensure this happens the gift card product can be assigned a "gift card" account code in place of a sales account code. When the SKU is added to a sales order, the liability account code will be assigned to the order row to ensure on invoicing, the revenue is not yet recognized.


How to create a gift card SKU

  1. If one doesn't already exist, create a current liability account code at Accounting > Chart of accounts specifically for recording the sale of gift cards. In the screenshot above we're using 2080.
  2. At Settings > Company > Accounting: Account codes (nominal codes) choose this code as the "gift cards" code.
  3. Create product records to represent each different value gift card for sale. In the prices tab of the product record, for the sales code choose the "gift card" code.
  4. For UK merchants, also assign the tax code. VAT is applicable as soon as the voucher is sold.

Gift card / voucher redemption

When the customer buys goods using the gift card, a normal payment against the order won't allow the correct accounting to be created since you're not actually receiving funds into a bank account.

For this reason, the payment can be added as a negative order row instead.

Once goods have been purchased with the voucher, the revenue from the original voucher sale can be recognized. This is done by entering a manual accounting journal to move the balance from the gift card liability account code to the gift card sales revenue account code.

How to enter a gift card payment (redemption)

  1. On the sales order where a gift card has been used, there will usually be a non-zero order total, and the order will not be shown as paid (since no money was taken via a regular payment method). We need to remove the need to take payment, since a voucher has been used. Add a new row.
  2. Enter the description as a gift card redemption, perhaps with the card reference if it has one.
  3. Set the account code to be the same as was used when selling the gift card (2080 in our example).
  4. Set the tax code to be the same as the actual product being purchased. This will ensure that the order has no tax liability (since the tax was accounted for when the voucher was first purchased).
  5. Enter the amount being paid by gift card as a negative amount.
  6. Take any additional cash payments using the "Take payment" option as normal.
  7. Invoice the order.

Here, an item of £200 has been fully paid with a gift card of the same value:


When the order is invoiced, the negative line will balance against the original line when the voucher was sold, and the revenue for the actual product (against code 4000 in our example) will be shown.

Accounting for gift cards : example

Here we have an order #1201 where a gift card was sold. Cash went into the Bank Current Account. Later, on order #1202, the [same] customer redeemed the card. 


Gift cards and Shopify

If you're using Shopify as a sales channel, you can choose one of your payment methods to be used when a customer redeems a gift voucher, rather than having to manually edit the order. For more information, see gift cards and Shopify.

Expired gift cards / breakage

When gift cards have been sold and not redeemed within the valid date range the revenue may be recognized. To recognize revenue for expired gift cards enter a manual accounting journal to debit the value from the gift card liability code and credit it to the gift card sales code. Alternatively, a separate account sales type account code can be used specifically for "Expired gift cards". 

The figure on the "Gift card" liability account code should be the net of the value with the gift card management company.

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