Plastic gift card transaction issues, recording sale twice

[Percus]

Hello, we have the plastic gift cards which seem ace apart from one huge flaw.

When someone purchases one, lets just say £100 is loaded on the card, the transaction goes through as a sale... fantastic, lets say on the same day the same card is redeemed on a purchase, the sale goes through as a sale via gift card... fantastic.

Now let say for simplicity that was the only transactions that happened that day, our sales reports shows us our daily taking/sales as £200.... definitely not fantastic, as we only actually did a £100 sale that day.... this is an issue for accountancy/tax purposes as our turnover shows higher than it actually is. Anyone else having this problem? any solutions? 

After investing money on these gift cards it would be real handy to fix this issue rather than stop using them.

Many Thanks Gregg

[Summer2024 · Accepted solution]

Hi @Percus !

Gift card sales can sometimes appear as double revenue in reports because the initial sale (loading the gift card) and the redemption both count as transactions. However, since gift cards act as a form of payment rather than additional revenue, there’s a way to adjust your accounting to reflect the correct turnover.

Here are a couple of potential solutions:

1️⃣ Use Accounting Adjustments – Many businesses track gift card sales separately as a liability, not revenue. When a gift card is sold, it’s recorded as ‘Deferred Revenue’ or a liability in accounting software. When it’s redeemed, it moves into actual sales revenue. If you're using accounting software like Xero or QuickBooks, you may be able to set up a rule to handle this automatically.

2️⃣ Square Reporting Workaround – You can filter reports to exclude gift card sales from net revenue. In your Square Dashboard, go to Reports > Sales Summary and look for the Gift Card Sales section. This helps ensure you're not overstating revenue.

3️⃣ Consult Your Accountant – Since tax and financial reporting vary, your accountant may be able to suggest the best way to categorize gift card transactions for accurate bookkeeping.

I hope this helps!

[Summer2024]

Also tagging a few Square Champs in the UK...not sure if they use gift cards or not. @doc_choc @Twiggy @Sam_400º 

[doc_choc]

@Summer2024 not noticed this to be honest, which doesn't mean it's not happening. I'll load a card up when I'm in the shop to see if we can replicate this behaviour.

[Summer2024]

MY HERO. 🤗 Thank you. Just let me know what happens. I'm happy to escalate, just want to replicate this if possible so it's easier to file a ticket with engineers. 

[Percus]

Hey @doc_choc, out of interest did you try it out?
Many Thanks