When looking at your Finance Summary Report, what is the difference between Gift Cards listed under Payments and Gift Card Sales listed under Liabilities? Are any of these gift card sales tracked under our total sales or do we need to account for all gift card sales separately? Also, how are manually issued gift cards tracked that have been used to purchase an item? I am trying to distinguish the difference between what revenue I received from purchased gift cards and manually issued gift cards, vs what was tracked as sales and where to find that information for my accountant.
Under liabilities mean that those cards or that accumulated amount of money hasn’t been redeemed or used therefore the potential redeeming is still yet to happen and for accounting purposes it’s a liability for your part. This is accrued accounting, have a look to this short explanation on how to account for gift cards.
I know unused gift cards are a liability. I’m just trying to understand how Shopify is reporting them. The reporting system is not very clear. “Gift Card Sales” under the liabilities section would be what we have received revenue for but have not sold any product in order to reflect under our “Total Sales” (I.e. exchange credit, gift cards customers bought but haven’t used), correct? “Gift Card outstanding balance” amount is in addition to the “Gift Card Sales” amount or are the “gift card sales” included in the “gift card outstanding balance” amount? “Gift Card Payments” section is also not helpful as it links manually issued and customer purchased cards in the same category. We do not receive revenue from manually issued gift card values. Also, I’m still trying to distinguish revenue received from manually issued gift cards vs customer bought gift cards and what has been tracked as sales. The linked YouTube video was not helpful for what I’m looking for. Thank you though!
“Gift Card outstanding balance” is included in “Gift Card Sales” (under liabilities). “Gift Card Sales” is the total sales, your total obligations if you will… that when you subtract the redeeming amount you get “Gift Card outstanding balance” which is your actual current obligations upon till certain point.
I haven’t had a case with manually issued gift cards so I don’t have all the information. Can you please give me more info to understand it? Perhaps a real example of yours?