Managing Gift Certificates: Tips for Selling and Redeeming in Your PMS

Gift certificates are an excellent way to enhance your property's offerings, attract new guests, and create memorable experiences. Whether for holidays, special occasions, or incentives, they provide a flexible option for customers while boosting your revenue. However, effectively managing gift certificates requires clear processes for selling, tracking, and redeeming them within your Property Management System (PMS).

In this article, we’ll walk you through how to implement a manual tracking system using a City Ledger House Account and a few dedicated codes. While Visual Matrix does not currently offer a built-in gift certificate feature, this process provides a reliable way to manage them effectively within the PMS—ensuring that every gift certificate you sell is accurately logged, properly redeemed, and accounted for.

Step 1: What you can start with

While some codes cannot be created by users, some foundations can still be started.

Create a Daily Report City Ledger Category: "GCE - Gift Certificates"

This account will be used to group all gift certificate transactions under a single category in the Daily Report.

Path: Management > Accounting Settings > Report Headings > Daily Detail Report

Create a Revenue Category "Gift Certificate"

This revenue category will be assigned to the redemption and expired write-off transaction codes.

Path: Management > Reports > History > Revenue Summary > Setup

Make sure you do not rename the F&B Category for the Gift Certificates. Any other category, if not already used, can be use.

Step 2: Contact Support for the following creation

Those next foundations of the process will require the help of our Client Experience team to create the appropriate tools for tracking, as users are not able to create City Ledger-related accounting codes or House Accounts on their own. Reach out to our Support team—open a ticket; there's no need to spend time on chat or the phone. They will create the necessary accounting codes and City Ledger category that will help you track all gift certificate activity in one place.

2.1. Ask our Support team to create a City Ledger House Account, which will be used to post and track all gift certificate sales and redemptions.

Create a City Ledger House Account "Gift Certificates - Holding"

Path: Management > Rooms > House Accounts > City Ledger

2.2. Ask them to create a dedicated payment code for each method that might be used to purchase a gift certificate (e.g., Visa, MasterCard, Cash, etc.). Since these payments will be posted to a City Ledger House Account, only City Ledger payment codes can be used. At this stage, both advance deposit and direct bill account payment types are already available. To avoid confusion with existing codes, we recommend setting up new, clearly labeled payment codes for each method. Additional codes can be created as needed.

GCVS - Gift Certificate Visa

GCMC - Gift Certificate Mastercard

GCAX - Gift Certificate Amex

GCDC - Gift Certificate Discover

GCCA - Gift Certificate Cash

Make sure the "Override Description" option is always set to "Yes." This is the field where you'll enter the gift certificate details (such as number, name, expiration date, etc.).
Avoid using the "Reference" field, as it is used by the system for other purposes (like storing credit card information) and may overwrite any information you enter there.

2.3. Finally, ask our Support team to set up the following City Ledger accounting codes—GCRO, GCEW, and 7GC—as explained below.

There are three City Ledger codes needed: one to post as an Advance Deposit on a reservation (7GC), one to offset the Gift Certificate in the City Ledger House Account (GCRO), and one to offset an expired Gift Certificate in the City Ledger House Account (GCEW). This last code requires special attention due to significant tax implications—be sure to review the related guidelines carefully before use.

7GC - Gift Certificate Adv Deposit

The use of the number 7 for the advance deposit code is intentional, as Visual Matrix recognizes 7 as the designated identifier for Advance Deposit codes. This code will function the same way as the existing "Advance Deposit Pre-Paid" code.

GCRO - Gift Certificate Redeem Offset

GCEW - Gift Certificate Expired Write-Off

💡 Important Note About Gift Certificates and Taxes

When a guest buys a gift certificate, you’re receiving money, but haven’t provided a room or service yet. That means it’s not revenue at that point—it’s a liability, and no tax is due yet.

Later, when the guest redeems the gift certificate, that’s when you’re providing a taxable service (like a room stay). At that time, you record the revenue and apply the appropriate taxes to the stay or service.

But what happens if the gift certificate is never used?

If it expires and you keep the money, that amount becomes revenue—even though no service was provided. This is known as breakage. And yes, depending on your location, the government may still require you to pay tax on that unredeemed amount.

👉 What to do in your setup:

When using the “Expired Gift Certificate Write-Off” code (GCEW), it should be set up as taxable revenue—just like room revenue—if your local laws require it.

✅ You don’t charge tax when the gift certificate is sold, but you may need to account for it if it expires.

📌 Always double-check with your local tax authority or accountant, as rules can vary by region. Some areas only tax actual services, while others tax breakage too.

Step 3: Selling a Gift Certificate

Once the codes are in place:

- Open the City Ledger House Account created for the Gift Certificates.

- Post the payment using the method the guest used to purchase (Visa, MC, etc.).

- Override the "Description", include all relevant details: "Gift Card Number, Expiration Date" (max 30 characters).

Example: "#12345 - Exp 12/31/25"

This entry creates a credit (liability) in the ledger that will be cleared once the gift certificate is redeemed.

Design and print your own custom gift certificate template with space to write in the certificate number, issue date, expiration date, value, and any terms. When a guest purchases a gift certificate, fill out this template and hand it to them along with their receipt. This adds a professional touch and ensures all necessary details are clearly documented for future redemption.

Step 4: Redeeming a Gift Certificate

Post the Gift Card as an Advance Deposit

When a guest is ready to redeem a gift certificate, post it as an Advance Deposit before checking in the reservation, using the code created earlier.

Enter the gift certificate number in the “Check Ref No” field (max 6 characters).

Example: "#0001"

Update the City Ledger Account

Go back to your Gift Certs City Ledger House Account:

- Post the redemption using the "GCRO - Gift Card Redeem Offset" code.

- Make sure you enter the same amount as a debit and include the following in the description: "Gift Cert Number, Date of Sale, Reservation Number".

Example: "#0001 - 04/15/25 – Folio #2934"

This keeps your ledger balanced and applies the value of the gift certificate to the guest’s stay.

How it will looks like in the City Ledger Account

Step 5: Handling Expired Gift Certificates

If a gift certificate is not redeemed before the expiration date:

- Go to your Gift Certs City Ledger House Account.

- Post a debit using the "GCEW - Gift Card Expired Write-Off" code. The posting will be before tax.

- Enter the Gift Certificate Number, Date of Sale, and Expiration Day" in the description field (max 30 characters).

Example: "#12345 - 04/05/24 - Exp 12/31/24".

Remember, the posting will be before tax, as the amount is now considered taxable revenue.

This removes unused liabilities from your books.

Step 6: Reconciliation & Tracking

- All gift certificate-related codes should be under the Gift Certificates category.

- Run your daily reports with this category in mind to keep a clear view of all activity.

- Periodically review the City Ledger House Account to reconcile any open entries and check the expired ones.

There is no automatic report for unredeemed or expired gift certificates. Manual tracking is advised using the comment fields.

By following these steps, you’ll have a reliable way to sell, track, and redeem gift certificates within your PMS. While reconciliation is manual, this method ensures accuracy, transparency, and a professional guest experience.

If you need assistance with setup or have questions about reporting, feel free to reach out to our Client Experience Team!

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