Gift Card Donation

[JohnnyP]

Every now & then we donate gift cards to different community events. How do I activate a gift card for say $50 if I'm not collecting the $50 because its a donation. Is there a donation button anywhere so we can keep track of how many donations we are giving away each year? 

[nbunda]

You have two options depending on how you’d like them reported:

• You can make gift cards discountable and then set up a 100% discount for them (Discount Gift Card Purchases In-Store )
• You can set up an alternate Payment Method for comped Gift Cards (How can I add money to a gift card for a giveaway? )
  
  

[Kirsten_H]

We use house accounts to close and track donations and business promotion type transactions.  I expense them monthly in our accounting software.  It works well for us.

[AlexisR]

Hi Kirsten,
I know this is an old post so I hope replying to it will get to you!
It sounds like you may have the accounting knowledge in this scenario that I am looking for.
So here come the T- accounts.....
Right now, if a manager wants to give a Gift Card to a charity they load the card and then apply a Manager Discount. No cash has changed hands. Because of this, we actually do not make an entry on the books.
The problem that I realized is that when a person returns to use that Gift Card there is no way of differentiating if that was a Gift Card that was comped or a Gift Card that was sold. Regardless of the scenario, the redeemed amount Debits the Liability. Therefore, if we were to stop selling Gift Cards today the Debits would out-weigh the Credits to the Liability and the account would never reconcile or match the reports in Toast. Do you have the same issue? If yes, how do you get around it? If not, how are you recording on your books?

Thank you!

[Kirsten_H]

Hi Alexis, 

When you sell the gift card, but then discount it, I'm assuming the value stays on the card (I've had to void GCs on occasion, but we generally don't discount them at the POS.  

When we do gift card donations (whether charity or just a business promo), we close the sale to a House Account.  the gift card liability is then recorded in the GL for Gift Card liability and the House Account payment goes into a GL for that.  We have a few internal expense House Accounts set up for tracking purposes.  At the end of the month, I make adjusting entries in our accounting software to transfer the donated GC sale from the House Account GL to corresponding expense GL.  The Gift Card sale stays put in the GC GL and is offset when the GC is used, just like any other.

We expense the GC at the time of purchase; it would be really hard to track when those cards are used unless you're recording all of the card numbers and checking them periodically.

When you discount the card, does it still show up as Deferred (gift cards) in your revenue summary? 

If those GCs aren't showing in your accounting software Gift Card Liability GL, but are showing on your Toast Reports, you might just need to make adjusting entries for them, debiting the appropriate expense accounts and crediting your GC liability so you've got those outstanding cards accounted for.

I hope that makes some sense, and that I'm understanding your situation correctly.  If not, let me know and I'll try to clarify. 🙂

Kirsten