Gift cards: cash today, an obligation tomorrow

A gift card is a customer paying you now for goods you will supply later. That makes it three things at once: good cash flow, a customer acquisition tool, and a liability on your books.

Why they are commercially good

Cash up front. You have the money before you have supplied anything.

A new customer, usually. The buyer is often a regular; the recipient frequently is not. A gift card is one of the few ways a customer brings you a new customer at no acquisition cost.

Overspend. Recipients commonly spend more than the card's value, and the excess is a normal-margin sale.

Breakage. Some cards are never redeemed. It is real revenue and it should not be the reason you sell them.

Why they need care

It is a liability, not revenue. Until the card is redeemed, you are holding money for goods you owe. Recording the sale of a gift card as revenue overstates your sales and, more importantly, hides an obligation.

VAT timing. The VAT treatment of a gift card sale and its later redemption is not intuitive and it depends on the type of voucher.Confirm the correct treatment with your accountant before you sell the first one. This is not a question to answer by guessing.

Fraud. Gift cards are attractive to abuse — issued without payment, or refunded to a different method.

The controls

• Issuing a gift card is a permissioned action. Not something any cashier can do at will.
• Every card has a unique code and a recorded issue: who issued it, when, for how much, and against which payment.
• Balances live in the system, not on the card, so a lost card is recoverable and a copied code is not spendable twice.
• Redemption is recorded against the card, with the remaining balance visible.
• No cash refunds against gift cards. A card redeemed for cash is a laundering route and a control failure.
• A weekly report of cards issued, redeemed and outstanding.

Physical or digital

Physical cards feel like a gift, work well in-store as a display, and cost money to produce and stock.

Digital cards — a code sent by WhatsApp — cost nothing, can be bought remotely, and are easier to send to someone in another city. Increasingly the default.

Most shops should offer both, with digital as the default and physical available for occasions where the object matters.

Expiry

Whether and how a gift card may expire is a consumer-protection question with regulatory implications.Confirm the rules with a qualified adviser rather than adopting a policy from another market.

Commercially: aggressive expiry generates complaints out of proportion to the liability it removes. A customer whose card expired tells people.

The reports to watch

1. Outstanding balance. The total value issued and not redeemed. This is your liability and it should be on your balance sheet.
2. Redemption rate. Proportion of value issued that has been redeemed, by month of issue.
3. Average overspend. How much more than the card value recipients spend — this is the number that justifies the programme.
4. Cards issued by staff member. A control check.

Selling more of them

Gift cards sell in seasons: Eid, Ramadan, graduation, weddings, and the giving occasions particular to your category.

Two practical moves:

• Display them at the till, not in a corner. It is an impulse purchase.
• Train one sentence: "would you like a gift card with that?" — it works in the same way attach rate does. Seeretail KPIs.

Which systems have them

Per our August 2026 audit, gift cards are present in Wameed, Foodics, NCR, Oracle, Geidea, Odoo and Sapaad — and absent in Rewaa, Marn, Revel and Hala.

See thepromotions feature.