Gift Card Accounting – Redemption
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When a guest redeems a gift card, something happens that did not happen at issuance – VAT must now be booked. This applies to multi-purpose gift cards. VAT follows the goods or services supplied, including whether food is served or taken away. Swedish VAT Act, Chapter 5 section 43. Here are the complete entries.
The core principle on redemption
Three things happen in the books:
- The liability decreases (debit 2421) – the restaurant's promise is now fulfilled
- Revenue is recognized (credit 3001, 3002 or 3003 depending on product category)
- VAT is calculated (credit 2620 for 12% food, 2610 for 25% alcohol)
Food examples at 12% below assume restaurant service. For takeaway, use the VAT rate applying to the item and sale date.
Simple example – full redemption
The guest has a 100 SEK gift card and eats for exactly 100 SEK (food only, 12% VAT).
Net calculation: 100 / 1.12 = 89.29 SEK (revenue) + 10.71 SEK (VAT) = 100 SEK
| Account | Name | Debit | Credit |
|---|---|---|---|
| 2421 | Gift card liability | 100.00 | |
| 3002 | Food 12% | 89.29 | |
| 2620 | Output VAT 12% | 10.71 | |
| Total | 100.00 | 100.00 |
Mixed VAT rate – food + alcohol
Say the guest has a 500 SEK gift card and consumes:
- Food for 300 SEK (12% VAT)
- Wine for 200 SEK (25% VAT)
| Account | Name | Debit | Credit |
|---|---|---|---|
| 2421 | Gift card liability | 500.00 | |
| 3002 | Food 12% | 267.86 (= 300/1.12) | |
| 2620 | Output VAT 12% | 32.14 | |
| 3001 | Alcohol 25% | 160.00 (= 200/1.25) | |
| 2610 | Output VAT 25% | 40.00 | |
| Total | 500.00 | 500.00 |
Important: the VAT rate is determined by the product, not by the fact that it is a gift card. Always split VAT just like on a cash-paid order.
Mixed payment – gift card + card
Common scenario: the guest has 200 SEK on the gift card but eats for 600 SEK and pays the remainder with a card.
| Account | Name | Debit | Credit |
|---|---|---|---|
| 2421 | Gift card liability | 200.00 | |
| 1580 | Card receivable | 400.00 | |
| 3002 | Food 12% | 535.71 (= 600/1.12) | |
| 2620 | Output VAT 12% | 64.29 | |
| Total | 600.00 | 600.00 |
Note: revenue and VAT are calculated on the entire invoice (600 SEK), regardless of which payment method was used. The split on the debit side only shows which asset/liability changes.
Related articles
- Gift card accounting – issuance
- Gift card partial redemption
- VAT accounts (2610, 2620, 2630)
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