Gift voucher

What a voucher is legally

A gift voucher is a paid claim the customer holds against the retailer. Anyone buying a voucher has paid and received nothing yet. In accounting the amount is therefore a liability, not revenue. Revenue and VAT arise only on redemption, and then for the goods actually bought, at their tax rate.

A frequent mistake follows from that: booking voucher sales as revenue reports income that has not been earned and pays VAT on an amount that does not yet represent a taxable transaction.

Expiry and validity

For vouchers with a long validity that can be redeemed against goods, a limitation period of three years applies, counted from the end of the year in which the voucher was issued. A shorter period in your own terms is generally invalid, because it unfairly disadvantages the customer. Expiry after a few months is therefore not enforceable.

The period starts with the year of issue, not the purchase date. A voucher issued in December does not lose a month when the year turns, it runs until the end of the third following year. In practice that means giving each voucher a clear issue date and storing the deadline in the system instead of tracking it by hand.

Partial redemption and remaining value

When a voucher is redeemed in part, a remaining value arises. That balance persists and can be used further. The retailer may not let it lapse on grounds such as the amount being too small. It makes sense to keep the balance visible and to tell the customer about it, for instance in the customer account and in the confirmation email.

With an order that is returned, the order of settlement comes up. Common and customer friendly is to apply the voucher first and refund the remaining amount paid afterwards. A clear rule in the terms prevents disputes, because both orders are conceivable here.

Voucher fraud in the checkout

Another point concerns security. Voucher codes can be guessed when they are short and predictable. Sufficiently long codes with a random structure are sensible, plus a lock after several failed attempts per account and address. It is also informative to watch which orders are combined with vouchers: voucher plus guest order plus different delivery address plus a high amount is a constellation that justifies a manual review.

For vouchers paid out from refunds, two rules are common. First, no cash payout, only offsetting or bank transfer. Second, a check on who redeems the voucher, because a passed-on voucher otherwise ends up with a third party. Both belong in the terms and in the system logic, otherwise they stay a statement of intent.