How do I (pre)load a Square Gift Card to sell at another retail store?

[Chadsayz]

The title of this thread has been edited from the original: Sams club and Costco gift cards

I Really hope I can find the answer here. Costco and Sam’s Club just agreed to carry our gift cards in their stores. The way it will work is that there will be an 8 1/2 x 11 design of our gift cards on their gift card stands.  The consumer will then pull the gift card design down (ie. Get two $50 gift cards for only $75)  and take it to the register. The clerk will then ring up the sale and go pull to “live/hot” gift cards from the back and give them to the consumer (fyi...the design the consumer brings to the register does not have a gift card inside). The gift cards that the clerk gets from the back are “live/hot” gift cards already loaded with a $50 value. However, Costco and Sam’s Club are only purchasing the gift cards from us for $30 ea. How do we send them to Costco and Sams club already preloaded so when the consumer comes to our location, we can just swipe the card and run it for the $50 value? I know we wouldn’t load $50 on the card and then send them to Costco to buy for only $30, so I’m really struggling to wrap my head around this. Has anyone done something like this and can help? 

[ryanwanner · Accepted solution]

First, @Chadsayz , good job on getting your Gift Cards out there! 🙂

I think the best way to do what you're talking about would be to set up a discount for the cards. Since it's a direct dollar off discount, your best bet is to leave the dollar amount blank so it's variable on the system.

Ring up all the cards with the $50 value, then run the discount for the dollar amount needed (xx cards times $20--math you'll have to manually do). The final total would be what you get paid for, but the cards are all preloaded at $50.

Happy selling!

[Chadsayz]

Hey Ryan, thank you so much for replying. However, I'm having a hard time figuring out the exact steps you are referring to. Is there anyway you could simply this for me and break out the steps? Basically, SAMs Club is sending us a check for a bulk purchase of (say 100 GCs). They are purchasing them at a discount from me (say $20, but the need to be loaded with $50). How do I make this happen so that I'm not recording the sell multiple times? Or recording too much. 

[ryanwanner]

Sure thing @Chadsayz !

First, on your web dashboard...

1. Items -> Discounts
2. Create Discount, name it Sam’s GC (or something similar)
3. Make sure the $ symbol is highlighted
4. Leave the dollar amount blank so you can put it in during the transaction. This way you’ll only have to enter one discount at the end of the transaction. Alternatively, you can enter the dollar amount of the discount here (from your example, they pay $20 for a $50 card, so you’ll enter $30 here.) The challenge with this is you’ll have to apply the discount one at a time. If you’re running multiple cards that will be a pain in the rear. 
5. Dont worry about changing any other setting here, just save the discount. 

Now, from your Point of sale app...

1. Tap the Gift Cards item in your item library. 
2. On this next screen, swipe the card. Put in the full dollar amount for the card ($50) on the next screen.
3. Repeat step 2 until you’ve loaded all the cards. No, Square doesn’t have a batch load option (hint, hint, @katieand , @Helen, and all... 😜)
4. Go to your Discounts item in the item linrary, find the Sams GC Discount. 
5. If you have left the discount dollar amount blank you’ll need to do some math. If you have loaded 10 $50 cards, you’ll see the total as $500. If Sams is giving you a $200 check ($30 off the retail price), you would enter $300 for the discount price. If you entered the dollar amount you will have to tap that discount item 10 times to get you to $300. 
6. Hit the Charge button in the bottom right. One tender option will be Other. Tapping that will allow you to cash out your sale by check. 

Please remember the the gift cards aren’t officially loaded until you complete the transaction and close out the check. 

Hope this helps!

[Chadsayz]

I can't express my appreciation enough for you taking the time to write this all out! This is super helpful.

I only have just one more question. If I load all these cards today, it looks like it will record in my POS as revenue (even though I won't get the check from SAMs for 30 days). Then, once the customer comes in to swipe that card, does it record as revenue again on the day of transaction? In other words, is it recording revenue twice?

Thanks again. I really appreciate your help with my questions.

[ryanwanner]

No problem @Chadsayz ! Glad I can help!

Since gift cards aren’t activated until the transaction is complete, you’ll have to close out the order before you receive the check from Sams. Your best bet is to just keep a note or let your bookkeeper know what’s going on for when the check does arrive. 

As for gift cards posting as revenue, just issuing the gift cards doesn’t count towards your Gross Sales for the day. You’ll see a line saying Gift Cards Sold on all yoir reports, but your gross sales total won’t reflect that number. Only when the Gift Cards come back into your store does it count towards gross sales. Yes, you collect payment when you sell the cards (well, kind of if you have to wait for the check...), but technically those funds aren’t yours. 

Think of Gift Cards this way: your customer (in this case Sams) is pre-paying you for your services. Until someone uses that prepayment, it’s still the money of customer who purchased the cards. On your Profit and Loss statement, you should have a Gift Card Liability section. This is where your total dollar amount of the cards would live. When a card is redeemed, your liability is reduced the dollar amount of the sale and your gross sales get counted. 

In in an ideal world, since that money for the cards isn’t officially yours until the card is redeemed, that money would sit in a separate bank account. When the card is redeemed, you would transfer the funds to your operating bank account. Realistically I know this doesn’t happen often if at all, but it is the best way. In case the unthinkable happens and your business were to close, you could be held liable for the open gift cards and may be sued for the money still outstanding. With the money in a separate account you could just give it back to the purchaser. 

Gift cards can be a toughie to wrap your head around, that’s for sure!

[Chadsayz]

Thank you so very much!

You have been more than helpful!

[SpotofTea]

I have a follow on question, Ryan, if you have a moment!  If you sold your gift cards at a discount (say Chad sold every $100 of gift cards to Costco for $70) and a customer redeemed a gift card at your store, would that 30% discount show up in your net sales figure?  More specifically, say on a $10 purchase, would your Gross Sales = $10 and your Net Sales = $7 ?

[TheGrindCoffee]

I have a follow up question for Chad.  Have you found a way to sell a bulk amount of gift cards at the same value without having to scan each card?  We also are selling to Costco and it takes us a long time to load money onto 800 gift cards individually but I haven't found a way to avoid doing them all individually.