Gift Certificate Template: Numbering, Expiry and Accounting
Gift certificate template guide: what to print, numbering and tracking, US expiry rules, sales tax, and how to record gift certificates in your books.
Quick answer: A gift certificate template is a reusable design for prepaid vouchers that customers buy and give as gifts. Each certificate should show your business name, the value or service, a unique certificate number, issue date, any expiry date (in the US usually at least five years out), redemption terms and an authorized signature, with every number recorded in a tracking log.
Gift certificates bring in cash before you deliver anything and attract new customers who receive them. They also create a liability on your books and come with consumer protection rules. This guide covers what to print on a gift certificate template, how to number and track certificates, expiry rules, sales tax and the accounting entries.
What Is a Gift Certificate?
A gift certificate (or gift voucher) is a prepaid document that entitles the holder to goods or services from your business up to a stated value, or to a specific service such as "one 60-minute massage". It is common for salons, spas, restaurants, studios, retailers, photographers, trainers and makers.
| Type | Example | Notes |
|---|---|---|
| Fixed-value certificate | "$100 gift certificate" | Most flexible, simplest to account for |
| Service certificate | "One deep-tissue massage, 60 min" | State what happens if prices rise |
| Promotional voucher | "$20 off, free with any $100 purchase" | Not paid for by the customer; different rules apply |
| Digital gift card | Emailed code | Same tracking needs, code checked at checkout |
What Should a Gift Certificate Template Include?
- Business name, logo and contact details (website, phone, address)
- Title: "Gift Certificate"
- Value in numbers and words, or the specific service
- To and From lines (optional but popular)
- Unique certificate number
- Issue date and expiry date if any (see the rules below)
- Terms: how to redeem, booking requirements, not redeemable for cash (subject to state law), lost certificates policy
- Authorized signature or initials
- Promotional disclaimer on free vouchers ("Promotional voucher, no cash value")
Gift certificate example
| Field | Example |
|---|---|
| Business | Willow Day Spa, 52 Market St, Portland, OR |
| Certificate no. | GC-26-4K7Q |
| Value | $150.00 (One hundred fifty dollars) |
| To / From | Maria / Daniel |
| Issued | Oct 29, 2026 |
| Expires | No expiration |
| Terms | Redeemable for any service or product. Book online or by phone and mention the certificate number. Remaining balance stays on file. |
| Authorized by | L. Chen |
How to Number and Track Gift Certificates
Numbering is your main protection against fraud and lost money. Use a format that includes the year and a code that is hard to guess, such as GC-26-4K7Q, rather than simple sequential numbers that are easy to fake. The invoice number generator can help you design a consistent format, and our invoice numbering system guide explains the principles.
Keep a gift certificate log (a spreadsheet is fine):
| Cert no. | Issued | Buyer | Paid | Value | Redeemed | Balance |
|---|---|---|---|---|---|---|
| GC-26-4K7Q | Oct 29, 2026 | Daniel R. | Card | $150.00 | Nov 14: $95.00 | $55.00 |
| GC-26-9MX2 | Oct 30, 2026 | Acme Corp (invoice) | ACH | $50.00 | No | $50.00 |
The total of the Balance column should always equal the gift certificate liability in your books. Give each buyer a receipt with the certificate number; our payment receipt template covers what to include, and invoice vs receipt explains when each applies.
Can Gift Certificates Expire? US Rules
Under the federal Credit CARD Act of 2009, implemented in Regulation E, 12 CFR 1005.20, gift certificates and store gift cards sold to consumers generally:
- Cannot expire sooner than five years after the date issued or the date funds were last loaded
- Must clearly disclose the expiration date
- Can carry dormancy, inactivity or service fees only after 12 months of inactivity, with clear disclosure, and no more than one such fee per month
Certificates given away for free as part of loyalty, award or promotional programs are generally exempt from these rules if they are clearly labeled as promotional. State laws can be stricter: some states ban expiration dates or fees on most gift certificates, and some require cash back for small remaining balances. Check your state's consumer protection or attorney general website. This is general information, not legal advice.
For most small businesses, "No expiration, no fees" is the simplest policy and avoids compliance questions.
How to Account for Gift Certificates
When you sell a gift certificate, you have received cash but not yet earned it. The usual entries:
| Event | Debit | Credit |
|---|---|---|
| Sell $150 certificate | Cash $150 | Gift certificate liability $150 |
| Redeem $95 for services (plus tax if taxable) | Gift certificate liability $95 | Service revenue $95 |
| Breakage recognized (per your policy) | Gift certificate liability | Breakage revenue, or unclaimed property payable if state law requires remittance |
Set up a dedicated liability account in your chart of accounts. Businesses following US GAAP generally recognize expected breakage in proportion to redemptions or when redemption becomes remote; small businesses on simpler methods should ask their accountant. Many states also have unclaimed property laws that can apply to unredeemed balances.
Sales tax
In most US states, the sale of a gift certificate is not taxable; tax is charged when it is redeemed for taxable items. In the example, if the $95 redemption were for taxable products at 8%, the customer would owe $7.60 tax at redemption, paid with the remaining certificate balance or another payment. See sales tax on invoices and use the sales tax calculator to check amounts.
Invoicing Bulk Gift Certificate Orders
Businesses often buy certificates for employees or clients. Send an invoice that lists the certificate numbers so both sides can reconcile later:
| Description | Qty | Value | Amount |
|---|---|---|---|
| Gift certificates, $50 each (incl. GC-26-9MX2, full list attached) | 20 | $50.00 | $1,000.00 |
| Gift certificates, $100 each (list attached) | 5 | $100.00 | $500.00 |
| Total (no sales tax on certificate sale) | $1,500.00 | ||
Create the invoice with the free invoice generator and attach the list of numbers. If you sell candles or crafts and use certificates for holiday sales, our guide on how to start a candle business covers related pricing. If you publish your services in a price list, state there whether certificates can be used for every item.
How to Design and Print Gift Certificates
- Size: common choices are a DL envelope size (about 99 x 210 mm), a 4 x 9 in card, or a quarter-page that fits a greeting card. Print several per sheet and trim.
- Paper: heavy card stock (around 250 to 300 gsm) feels like a gift and is harder to photocopy convincingly.
- Branding: logo, brand colors and a short line about what you offer, so recipients who do not know you understand what they can buy.
- Security: unique code, signature, and optionally a stamp, foil sticker or perforated stub you keep for your records.
- Digital version: export the same design as a PDF with the code filled in for customers who want to email it.
Keep the terms short on the front and put the full redemption terms on the back or on your website.
Gift Certificate Policy Checklist
- Expiry policy that meets federal and state rules (or no expiry)
- No fees, or fees that meet the 12-month inactivity rules
- Rules for partial redemption and remaining balances
- Lost or stolen certificate policy (replace only with proof of purchase and an unused number in the log)
- Whether certificates can be used for sale items, deposits or online orders
- Price policy for service certificates when prices change
- Who can issue and sign certificates
- Monthly reconciliation of the log against the liability account
Common Gift Certificate Mistakes
- Sequential, guessable numbers that are easy to forge.
- No log, so partial balances and redemptions are lost.
- Recording sales as revenue immediately instead of as a liability.
- Charging sales tax twice, at sale and at redemption.
- Short expiry dates that break federal or state rules.
- Service certificates without a price policy when your prices go up.
A good gift certificate template, a numbered log and correct accounting turn gift certificates into easy extra revenue. For corporate orders and receipts, use the invoice generator on this site, which is free, needs no sign-up and creates a PDF in your browser that you can download and send.
Frequently asked questions
Can a gift certificate expire?
In the US, federal rules under the Credit CARD Act and Regulation E generally prohibit selling a gift certificate or store gift card that expires sooner than five years after it was issued or last loaded, and the expiry date must be clearly disclosed. Many states go further, and some ban expiry dates on most gift certificates entirely. Promotional certificates given away free are treated differently.
Can I charge fees on unused gift certificates?
Under federal rules, dormancy, inactivity or service fees are generally allowed only if the certificate has had no activity for at least 12 months, the fees are clearly disclosed, and no more than one such fee is charged per month. Several states ban these fees altogether. For a small business, the simplest approach is to charge no fees.
Do I charge sales tax when I sell a gift certificate?
Generally no. In most US states, selling a gift certificate is treated like accepting cash in advance, and sales tax is charged when the certificate is redeemed for taxable goods or services. The redemption sale is taxed at that time based on what the customer buys. Check your state revenue department's guidance, especially for certificates sold for a specific service.
Is gift certificate money income when I sell it?
For accounting purposes, cash from an unredeemed gift certificate is usually recorded as a liability (often called gift certificates outstanding or deferred revenue) because you still owe the customer goods or services. You record revenue when it is redeemed. Tax timing rules can differ from book rules, so ask your accountant how to report unredeemed certificates on your tax return.
What happens to gift certificates that are never redeemed?
Unredeemed balances are called breakage. Depending on your accounting method, you may recognize expected breakage as revenue over time or once redemption becomes unlikely. Separately, many states have unclaimed property laws that may require businesses to report and remit certain unredeemed gift certificate balances to the state after a dormancy period, with exemptions that vary by state.
How do I stop gift certificate fraud?
Give every certificate a unique, non-sequential-looking serial number or code, record it in a log when it is issued, and mark it redeemed when used. Use paper with a design that is hard to copy, add a signature, and for digital certificates use a code that is checked against your log. Never accept a certificate that is not in your log without investigating.
Can a gift certificate be redeemed for cash?
Most businesses state that certificates cannot be exchanged for cash, but some states require cash back when the remaining balance is below a small amount. Check your state's rules and print your policy on the certificate. If a customer spends less than the certificate value, record the remaining balance in your log or issue a new certificate for the difference.
Should I give a receipt when I sell a gift certificate?
Yes. Give the buyer a receipt showing the amount paid, date, payment method and the certificate number. This proves the purchase if the certificate is lost and helps your bookkeeping. If a business buys certificates in bulk, for example as employee rewards, send an invoice listing the certificate numbers and values.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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