At my business I currently use paper gift cards as the Square plastic gift cards do not make financial sense for me at this time. When I sell them, I have an item in inventory "Gift Card" with different amounts that is used to charge the customer.
When the receiver of the gift card comes in for a product or service and redeems the gift card, I use the "Other Gift Card or Certificate" option within Square POS to log the same. Up to this point everything functions as it should - however, when the transaction is closed out using "Other Gift Card or Certificate" it logs this as income/profit and shows up on my sales reports.
By its very nature a gift card is a no-profit tender. The income was recognized at purchase of the gift card, not at redemption of the gift card. So what I need to know is, is the "Other Gift Card or Certificate" option doing this in error and needs to be fixed? Or is this option functioning as designed and I need to stop using it? Having it log double income which means double taxation is a problem.
I'd love it if this could be fixed, or if there was a switch we could use to tell the software "don't log this as income". Otherwise my options are use a discount code to zero out each transaction, or run the reports and remember to edit them for my accountant each time.
Please see the attached screenshots for clarity.
