Gift Card Accounting – Redemption
When a guest redeems a gift card, something happens that did not happen at issuance – VAT must now be booked. According to VAT Act Ch 5 § 40, VAT is calculated on the actual consumption, at the VAT rate applicable to the goods. 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)
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 | |
| 3001 | 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 | |
| 3001 | Food 12% | 267.86 (= 300/1.12) | |
| 2620 | Output VAT 12% | 32.14 | |
| 3003 | 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 | Bank/card account | 400.00 | |
| 3001 | Food 12% | 535.72 (= 600/1.12) | |
| 2620 | Output VAT 12% | 64.28 | |
| 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)
This feature is part of Vendion POS.
Curious how it looks in practice? Read more about the product or book a short demo.
Was this article helpful?