Teach Soap

I am planning on making gift cards to sell at my brick/mortar store for my products. Making them is not a problem. I already have them designed. However... the way the work has me confuzzled. Scenario: Person A buys a $10.00 gift card for Person B. Money is accounted for in that days sale. 1) When person B uses gift card, how do I account for the product (sale) bought? 2) and if they use only $5.00 of the gift card, do I give cash back? That would then show a negative sale that day if I don't count for a 2nd time the sales.

I really need some input on this, as I really want to have them ready by next week. Have not decided what/how we will be handling christmas november sales yet.

Thanks in advance!

Julz

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JKM Creative Enterprises

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JKM Creative Enterprises

First let me say that I haven't done these myself but I've worked in places that did their own gift certificates. Off the top of my head, you definitely want an expiration date! You can make this generous, say up to one year from a given date (must put this on the card and in your records), but no expiration made a major headache the year after for the small chain I worked for. Do you want the gift card usable on any items, even sale items? If not, be sure you specify they can't be used on discounted, bargain, sale, etc merchandise. The last item, #9, wasn't clear to me. Are you saying you will give cash change but only in whole dollar amounts? Do you know how you will account for this difference in your books? Do you intend for these to be a single use only so they can't carry the balance over to another purchase? Gift certificates imply one use to me and gift cards imply I can carry the balance over to a later purchase. That may sound picky but people are used to buying gift cards from large chains that allow them to apply the amount to multiple purchases. As for the original questions, 1) You can create an item gift certificate that you can sell. Then you create a payment type called gift certificate. 2) Cash change is up to you. If you won't be doing it, you definitely need to make that very clear to the purchaser and on the gift certificate/card so the user understands beforehand. I don't know how I'd account for the difference, sorry. If you decide to give change, using the entire amount of the gift certificate as payment using the gift certificate payment type won't mess up your accounting as the money you give back is just change. If doing this, are you going to require a minimum purchase amount? Otherwise, someone may buy your least expensive item in order to get the most change back. (Yup, saw that happen a couple of times.) Whew! Sorry for being so long winded! Good luck!

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Linda

I learn so much when I can't leave well enough alone!

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Jen
"Soap and water and common sense are the best disinfectants." William Osler

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JKM Creative Enterprises

I too was confused with the wording on number 9.
I don' know if you sell on line or not, or ship from your b&m or not, but if you do either one, you need to mention the exclusion or inclusion of shipping/mailing fees.
Do you gift wrap for a fee? Can that be included in the use of the card?
Do you have a minimum purchase or can they come in and buy something for a dollar and use their gift card (this may be a legal issue as well, so check before making a limitation)?

As for the expiration date, that is a hassle too, but the law is the law. So you allow your bookkeeper to deal with it. But I do know that if you sell a 50$ card today, that is 50$ in sales out the door today. If the gift recipient comes in tomorrow and spends their 50$ card that does not get written up as a sale on tomorrow's books, otherwise you would look like you sold 100$ worth of products when you only sold 50. You for sure need to track it, so it does get written down, along with the card number in the daily ledger.

I use certificates and I have a file box just for those. When redeemed, I track them on the daily ledgers and then note on the file box card too. If they spend more, the additional money gets rung up as a sale for that day.

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Remember, it's not just that we weather the storm, but how we dance in the rain.

Tammy

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JKM Creative Enterprises

If that is the case you will have to go old school and write down each card number on a file card and keep them all together in a file box. Put all the customer info on the card just to be cautious. You will have to adjust the balance on those cards as they are used. On your bookkeeping ledger you make the purchase of the card a daily sale and put it on the income/cash line, along with a side note of the card number. When it is used, you write that figure on your daily sheet in brackets so that it is recorded, but not included in the daily cash amounts. You then will also need to put the amount used on the appropriate file card with the date, time, amount used and any other info you see fit to include for your records. Make sure you alter the file card while the person is in your shop. I would make a record of who used it as well, just in case there are issues at a later date. If there is anything you are unsure of, speak to your accountant, especially since every state is different in their requirements.

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Remember, it's not just that we weather the storm, but how we dance in the rain.

Tammy