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Accounting for Shopify Gift Cards
Accounting for Shopify Gift Cards

Purchases of Shopify Gift Cards are reported separately from Product Sales so that they can be credited to a Gift Card Liability account

Ashley Schroder avatar
Written by Ashley Schroder
Updated over a week ago

A2X separates Gift Card purchases and revenue received through the Shopify gift card gateway to make it easier to map them to a liability account. A2X will offer to create a generic default Gift Card liability account. You can choose any other account you wish and do not need to use the default option.

There are two ways that gift cards will appear in A2X when imported from Shopify, you can read more about this HERE.

A2X lists purchases of Gift Cards in a line item called 'GiftCardSaleLiability' to indicate that the purchase of a Gift Card is a liability rather than part of Gross Sales. It's important to note that A2X can only use this description if the Shopify gift card feature is being used. For gift cards that are not handled via Shopify's built-in gift card functionality, please see our article about using product types to detect Gift Cards.

On your Accounts and Taxes page you will see a new section called Gift Card Liabilities. This section groups together the sales of gift cards 'GiftCardSaleLiability' as well as the previous 'ProductSalesNotTaxed - Gift Card' which is no longer used (refer to the note about previous versions below).

By default, A2X will recommend that they are mapped to a generic default liability account called 'Shopify Gift Card Liabilities'.  

Payments made through the Gift Card gateway will also be placed in the new mapping section to better reflect that those payments represent a reduction in a shop's gift card liability. These will be of the form Sale Gateway Gift Card and Refund Gateway Gift Card.

You can see examples of these transactions in the screenshot below:

If you have already mapped 'ProductSalesNotTaxed Gift Card' and the 'Gift Card', A2X will continue to use your existing mappings, however we do recommend these to be mapped to a liability account if they aren't already. 

We can a report available to help keep your Gift Card Liability Account balanced, read more here.

Gift Cards in previous versions of A2X
In payouts imported before February 2020, the purchase of Gift Cards was marked as 'ProductSalesNotTaxed - Gift Card'. This meant that sales of Gift Cards were previously grouped together with other sales revenue in the main Product Sales section.

Going forward the new Gift Card description will be used and the Gift Card sales and usage will be grouped separately from sales. Any prior Gift card sales can also be accounted for against the same gift card liability account. If you refresh older payouts the new description will be updated.

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