Gift card sale – Why is it negative?
In accounting, the sale of a gift card (or voucher issuance) is treated differently than a regular product sale. When you sell a gift card, you are not delivering a product or service immediately, but rather accepting cash in advance for future use.
Deferred revenue explained
When a gift card is sold, it creates a liability on your books. This is referred to as deferred revenue or unearned income.
In payment or accounting reports, this may appear as a negative value to indicate that the revenue is not yet earned.
The negative amount serves as an offset, balancing your total recognised revenue until the voucher is redeemed.
What happens when the gift card is used?
When a gift card is redeemed, the associated value is transferred from liability to recognised revenue.
In the report, this appears as a positive amount, reflecting income that is now earned.
Example in your report
Report Line | Value | Explanation |
Voucher Issuances | -200 | Gift cards sold – shown as deferred income |
Voucher Redemptions | +200 | Gift cards redeemed – now counted as revenue |
If you have further questions on how to track or reconcile gift card activity in your reports, please contact your Account Manager or our Support Team.