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-   -   Setting up Gift Card Accounts (https://www.askmehelpdesk.com/showthread.php?t=762458)

  • Aug 13, 2013, 08:08 AM
    hunter5
    Setting up Gift Card Accounts
    We are giving away gift cards to individuals for help with advertising etc. I am trying to figure out how to set this up in the chart of accounts but am confused as to what offsets the gift card liability. Once the gift card is redeemed I would make an entry hitting Gift card liability and advertising expense etc, but once we hand out a gift card, what would be the correct way to account for it? We use Macola as our ERP system so its not as intuitive as other accounting softwares. Any help would be appreciated.
  • Aug 26, 2013, 08:02 PM
    SheSaidTeAmo
    I think you might find these questions below helpful:
    https://www.askmehelpdesk.com/accoun...rds-82700.html
    https://www.askmehelpdesk.com/accoun...se-222653.html
    https://www.askmehelpdesk.com/accoun...es-375018.html
    https://www.askmehelpdesk.com/accoun...ed-356471.html
  • Aug 27, 2013, 12:56 PM
    Fidget1
    In this instance, you don't do any accounting for the gift cards as you hand them out. They should be treated as a discount to the customer at the point they are redeemed and not recorded as a liability simply because they have been given out.

    As for the marketing/advertising cost of the promotion, that should be expensed straightaway, on its own and in full, because it's basically a fixed cost that will have to be suffered regardless of the take-up of the promotion.

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