less than a minute read • Updated 35 minutes ago
Gift cards overview
What gift cards are, how gift card codes work, and how they interact with taxes, subscriptions, currencies, and your accounting.
Gift cards let customers purchase or redeem stored balances that can be applied toward future orders in your store.
How gift cards work
Gift cards are similar to coupons in a few ways. Just as a coupon defines the discount itself and the “coupon code” is what the customer enters, gift cards have “gift card codes” that the customer enters at checkout. Unlike coupon codes, however, gift card codes can carry a balance, so they can be reused until that balance reaches zero. Gift card codes also apply to shipping costs, which coupon codes do not.
Foxy provides options to restrict and limit gift cards, but most merchants don’t use any restrictions. Foxy also allows setting expiration dates, but “normal” gift cards in most countries, states, provinces, and regions cannot legally be made to expire. If you plan to use any restriction functionality, check the laws for the locations you sell into first.
A gift card in one currency cannot be used if the cart is in a different currency.
Gift cards can only be viewed, created, and modified through the Foxy admin or the API — support is not available in the legacy admin.
How gift card codes attach to customer accounts
When a customer uses a gift card code (or has one created for them) and does not check out as a guest, that gift card code is attached to their customer record. After that point, only that customer can use the code — if a different customer tries to use it, they’ll see an error. Gift card codes can also be attached to customers directly via the API.
Once a gift card code is attached to a customer, it’s automatically applied whenever that customer logs in at checkout.
Coming soon: customers will be able to attach a gift card to their account from the customer portal.
Taxes, shipping, and product restrictions
If a gift card has a product or category restriction, but the transaction also contains items not covered by that restriction, taxes and shipping are still discounted using the gift card’s balance.
For example, if a cart contains a $30 shirt and $30 pants, with $6 in taxes and $10 in shipping, and the customer applies a $100 gift card that only applies to shirts, the discount applied would be $46 — the $30 shirt plus the full $6 in taxes and $10 in shipping.
Gift cards and subscriptions
If a gift card is applied to a subscription, it continues to apply until its balance is used up. The gift card stays attached to the subscription even after the balance is exhausted — it just stops applying a discount. If more balance is later added to the gift card, it resumes applying discounts starting at the next renewal.
Even if a gift card reduces a subscription’s cost to $0, the customer still needs to provide a payment method at checkout. Once the gift card balance is exhausted, the customer’s saved payment method begins being charged for the subscription renewal.
Accounting considerations
Before selling gift cards, talk to your accountant about how they affect cash versus accrual-based bookkeeping. If you sell a $100 gift card, you receive $100 now, but you also take on a $100 liability that needs to be accounted for.