How to Bill a Client for a Gift Card: Clear Format and Best Practices
July 23, 2025

How to Bill a Client for a Gift Card: Clear Format and Best Practices

TL;DR

When billing clients for gift cards, use a simple, clear invoice format that shows the prepaid amount, gift card details, terms, and payment info. Keep billing separate from product delivery, record revenue correctly, and ensure compliance with local laws. Integrate with your POS or billing software to track sales and redemptions smoothly.

1. Understand the Billing and Gift Card Structure

Billing for gift cards is different from regular sales because the client pays upfront for future use—not immediate goods or services. Your invoice should include:

  • The gift card amount (the prepaid value).
  • The type of gift card (physical, digital, rechargeable, or variable value).
  • Any terms and conditions about expiration, fees, or usage limits.
  • The unique gift card code or serial number that ties the bill to the issued card.

2. Use a Standard Billing Format for Gift Cards

Your gift card invoice should include:

  • Seller information: Business name, address, contact.
  • Client information: Name and billing address.
  • Invoice number and date for tracking.
  • Description: For example, “Gift Card Sale” or “Prepaid Gift Card” with the card value.
  • Gift Card Code/ID: Unique code for tracking the card.
  • Amount charged: The prepaid amount on the card.
  • Payment terms: Usually full payment upfront.
  • Tax details: Include if required by your local regulations.

Example format:

DescriptionGift Card CodeQuantityUnit PriceTotal Amount
Prepaid Gift Card $100GC-1234567891$100$100

3. Account for Gift Card Sales and Redemption Separately

Since gift cards are prepaid:

  • Record the sale as deferred revenue (a liability) until the card is used.
  • Recognize the revenue only when the gift card is redeemed.
  • Use your POS or billing software to automate this process and reduce errors.

4. Integrate with POS or Gift Card Systems

If you use a POS system (like Shopify) or a dedicated gift card platform:

  • Enable gift card features to automatically create invoices when cards are bought.
  • Send clients their unique gift card codes along with the invoice or receipt.
  • Track redemptions clearly within your system.

5. Transparency and Compliance

Make sure your billing complies with local rules by:

  • Clearly stating gift card expiry dates and any fees.
  • Following disclosure rules for prepaid cards.
  • Presenting gift card information clearly on invoices to avoid client confusion.

Summary

Using this format helps you bill gift cards clearly, keep correct records, and build trust with clients by being upfront and organized. You can also integrate this with your existing systems to simplify processes.

References and Resources

For additional detail or to stay updated on best practices, check these recent resources: