Gift Card – Expiry to Account 3960 (Forfeited Income)

A unique property of gift cards is that they have an expiry date. If the guest doesn't use the card before then, the balance is forfeited – for the guest, but for the restaurant it becomes income. And it's a special kind of income: VAT-free.

The core principle

On gift card expiry with balance remaining:

• The liability decreases (debit 2421) – the restaurant no longer owes anything
• Forfeited income is booked (credit 3960) – the restaurant keeps the money
• No VAT – it was never a sale of goods/services, so no VAT event occurs

The legal basis

Swedish VAT law (VAT Act Ch 5 § 40) says VAT is calculated when the customer accesses goods/services. If the card expires unused, no "access" has occurred – hence no VAT event.

The practical consequence: the money becomes pure profit (tax-wise income tax 20.6%, not 12% or 25% VAT).

The journal entry

If a gift card of 200 SEK expires with full balance:

No VAT accounts. Just 2421 → 3960.

How Vendion handles it

Vendion runs a nightly job (scheduled at 02:45 UTC):

1. Find gift cards where the expiry date is today or earlier and the status is still "active"
2. Update status to "expired"
3. Add an expiry entry in the gift card ledger
4. Create the voucher: D 2421 / C 3960 for the remaining balance

Concrete example – fully unused card

Guest buys gift card for 500 SEK (January 10, 2024). Card valid 12 months. On January 10, 2025 the card has not been used.

• Day 1: D 1580 / C 2421 – 500 SEK
• Day 366: D 2421 / C 3960 – 500 SEK
• 2421 balance: 0 SEK
• Operating income 3960: +500 SEK (VAT-free)

Tax implications

Forfeited income from gift cards is:

• Taxable income (taxed as regular operating income, 20.6% corporate tax 2024)
• VAT-exempt (no VAT to report)
• Reported in the tax return as other operating income

Related articles

• Gift card accounting – issuance
• Gift card partial redemption
• Monthly closing – checklist