Gift Card Accounting Guide
How ReloadCard transactions appear in your books and what your accountant needs to know.
The golden rule
A gift card sale is NOT revenue. It is a liability (deferred revenue). Revenue is only recognized when the consumer spends the gift card on your goods or services.
How each transaction type works
Card load (consumer pays $100)
| Account | Debit | Credit |
|---|---|---|
| Cash (Stripe) | $95.00 | |
| Platform Fee Expense | $5.00 | |
| Gift Card Liability | $100.00 |
You receive $95 in your Stripe account. You owe the consumer $100 in goods/services. The $5 difference is the ReloadCard platform fee (5%).
Redemption (consumer spends $60 at your store)
| Account | Debit | Credit |
|---|---|---|
| Gift Card Liability | $60.00 | |
| Revenue | $60.00 |
This is when you recognize revenue. The liability decreases and sales revenue increases. For Shopify merchants, this happens automatically when the gift card is used at checkout.
Transfer IN ($100 transferred to your store)
| Account | Debit | Credit |
|---|---|---|
| Cash (Stripe Transfer) | $95.00 | |
| Platform Fee Expense | $5.00 | |
| Gift Card Liability | $100.00 |
You receive real cash ($95) via a Stripe Connect transfer. A new gift card liability ($100) is created for the consumer. The 5% fee is your customer acquisition cost — you gained a new customer with $100 to spend.
Transfer OUT ($100 transferred from your store)
| Account | Debit | Credit |
|---|---|---|
| Gift Card Liability | $100.00 | |
| Cash (Stripe Reversal) | $100.00 |
The original Stripe payment transfer is reversed — $100 returns from your account to the platform. Your gift card liability decreases by $100. Net impact: zero. You return money for goods you did not deliver.
What appears in Stripe
Consumer card load
Payment: $100.00 from consumer Type: Destination charge Transfer to your account: $95.00 Application fee (ReloadCard): $5.00
This is a standard Stripe destination charge. The $95 transfer to your account creates a transfer ID that can be reversed if the consumer later transfers out.
Transfer IN from another store
Transfer received: $95.00 From: ReloadCard Platform Description: "Cross-store transfer from Coffee Shop" Transfer group: txfr_group_xxx
This is NOT a customer payment. It is a settlement transfer from the ReloadCard platform. Book it as cash received alongside the new gift card liability.
Transfer OUT to another store
Transfer reversal: -$100.00 Description: "Cross-store transfer to Bookstore" Original transfer: txfr_xxx
This is NOT a refund to a customer. It is a reversal of a previous payment transfer. The money returns to the ReloadCard platform for settlement to the destination store. Book it as cash returned alongside the gift card liability reduction.
Shopify integration
For Shopify merchants, ReloadCard creates and manages gift cards through Shopify's native gift card system:
- Card load/reload: Creates or credits a Shopify gift card — appears in Shopify's Gift Cards report
- Redemption: Consumer uses the gift card at Shopify checkout — Shopify auto-records the sale and reduces gift card balance
- Transfer in: New Shopify gift card created — appears in Gift Cards report
- Transfer out: Shopify gift card debited — balance reduced in Gift Cards report
Shopify handles the gift card liability tracking automatically. Your Shopify Finance reports will show accurate gift card balances.
Non-Shopify merchants
If you use the Open API (not Shopify), ReloadCard's database is your gift card ledger. Use our transaction report to reconcile:
- Transaction Report (CSV): Download from your dashboard or call
GET /api/merchant/reports/transactions?format=csv - Monthly Summary: Call
GET /api/merchant/reports/summary?month=2026-04
Provide these reports to your accountant monthly. The CSV includes all columns needed for journal entries: date, type, gift card liability change, cash received, and platform fees.
Monthly reconciliation checklist
- Download the transaction report CSV for the month
- Verify total cash received matches your Stripe dashboard payouts
- Verify outstanding gift card liability matches the summary report
- For Shopify: cross-check against Shopify's Gift Cards report
- Book platform fees as an operating expense
- File the report for audit trail
Tax implications
- Gift card sales are NOT subject to sales tax in most US states — tax is charged when the gift card is redeemed for goods/services
- Platform fees (5%) are a deductible business expense
- Breakage (unredeemed gift card balances) may be recognizable as income after a period — consult your tax advisor and check your state's escheatment/unclaimed property laws
- Cross-store transfers are not taxable events — they are balance movements, not sales
Glossary for your accountant
| Term | Meaning |
|---|---|
| Destination charge | Stripe payment where funds are routed to your account via a transfer |
| Application fee | ReloadCard's 5% platform fee, deducted from the transfer at charge time |
| Transfer reversal | A previous transfer to your account is reversed (NOT a customer refund) |
| Settlement transfer | Funds sent from the platform to your account for a cross-store transfer |
| Gift card liability | Total unredeemed gift card balances — money you owe consumers in goods/services |
| Breakage | Gift card value that is never redeemed — may become revenue after statutory period |
Questions?
Contact support@reloadcard.app for accounting or reconciliation help.