Promotional Gift Cards

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#1
TaxOrNo  
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Florida
Bar/restaurant issued free gift cards prior to opening. I'm not sure how to handle these. One possibility is to DR-Promotions/CR-Gift Card Liability for the released cards. Then as they are redeemed DR-GC Liability/CR-Sales, treating them as a payment method just like cash or credit card. See problems with this? Or have a better way? I've researched the 'net and can't find any agreement in what I'm reading. TIA
 

#2
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WA State
They are a nothing
~Captcook
 

#3
TaxOrNo  
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Florida
I agree they have no value. But I don't think they can be ignored. I'm not sure about an entry for when they are issued because, as we've said, there is no value. But doesn't there have to be something to post against when they are redeemed?
 

#4
makbo  
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I don't see why anything needs to be reported when issued. It's just like running an advertisement offering a discount.

Just record as a discount when the sale is made.
 

#5
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TaxOrNo wrote:But doesn't there have to be something to post against when they are redeemed?


Agree with Makbo.
There should be no sale revenue recorded when they are redeemed. That's how they are 'recorded'.
~Captcook
 

#6
TaxOrNo  
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I appreciate the feedback. I'll just record them as discount rather than a payment method when they are redeemed.

Thanks!
 

#7
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NC
TaxOrNo wrote:Bar/restaurant issued free gift cards prior to opening. I'm not sure how to handle these. One possibility is to DR-Promotions/CR-Gift Card Liability for the released cards. Then as they are redeemed DR-GC Liability/CR-Sales, treating them as a payment method just like cash or credit card. See problems with this? Or have a better way? I've researched the 'net and can't find any agreement in what I'm reading. TIA


Why do anything?? Is this really material?? Giving away a thousand or two in meals??
 

#8
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Northern MI and Coastal SC
Agree, discounts. We did this on occasion when I worked for a wholesaler/retailer, and they were treated as discounts upon redemption since they had no actual liability due to nothing having been received in return.
 


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