---
title: "Gift Cards and Loyalty: The December Revenue That Is Not Revenue Yet"
slug: "gift-card-loyalty-bfcm"
url: "https://joy.so/blog/gift-card-loyalty-bfcm/"
kind: "post"
author: "Thomas Nguyen"
author_url: "https://joy.so/author/thomas/"
published_at: "2026-10-30T09:00:00.000+00:00"
updated_at: "2026-10-30T09:00:00.000+00:00"
description: "Shopify does not count a gift card sale as a sale. That one rule moves part of December's revenue into January."
category: "Loyalty Strategy"
tags: ["Loyalty Strategy", "BFCM & seasonal", "Program design", "Loyalty Program"]
reading_time: 10
feature_image: "https://cdn-web.joy.so/cdn/image/2026/10/row12a-gift-cards-75d287.webp"
---

# Gift Cards and Loyalty: The December Revenue That Is Not Revenue Yet

Here is a thing you can check in your own Shopify admin in about thirty seconds, and most merchants have never noticed it. Sell a $100 gift card today and your sales reports will not move. Not the total sales figure on your home analytics card, not any sales report. [Shopify's own documentation on finance reports](https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types/default-reports/finances-report) explains why in one sentence: **"Selling a gift card isn't counted as a sale because it's a liability"**.

It becomes a sale when somebody spends it. Which means a meaningful slice of what your store takes in during December is not December revenue at all — it is January and February revenue that has already been paid for, by somebody who is not the person who will spend it.

![Screenshot of Shopify's finance report documentation on gift cards](https://cdn-web.joy.so/cdn/image/2026/10/shot-giftcard-finance-bf47f0.webp)

_Shopify's own wording, read 13 October 2026. [Shopify Help Center](https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types/default-reports/finances-report)_

That fact has consequences for how you read the season, for what you owe, and for how a loyalty program should treat the orders on both ends of it.

**Key Takeaways**

- Shopify does not count a gift card sale as a sale. Its own documentation says so: selling a gift card is a liability, and it is excluded from every sales report until the card is redeemed.
- That means part of your December trading is booked in January and February, which undercuts the usual story about the new year being dead.
- You can read the liability in your own admin. The Outstanding gift card balance report shows what you owe, and an expired card's balance keeps counting toward it.
- An order paid with a gift card still earns loyalty points, because Shopify classes gift cards as a payment method rather than a discount.
- Every circulating statistic about when gift cards get redeemed traces back to no reachable primary source. The accounting mechanic is certain; the timing is not, and anyone quoting a day count is quoting a roundup.

**Published 30 October 2026.** Every behaviour below was read from Shopify's own finances-report documentation on 13 October 2026 and is linked. Where a figure has no reachable source, this page says so instead of quoting it.

## What Shopify's reports actually do

| Event | How it is treated | What the documentation says |
| --- | --- | --- |
| Selling a gift card | Not a sale | "Selling a gift card isn't counted as a sale because it's a liability". It appears in no sales report and not in the total sales figure on your home analytics card. |
| Where the sale does appear | Net sales from gift cards | A separate finance report, plus the Payments report under whatever method the customer paid with. |
| Redeeming the card | A sale, at full item value | "When the gift card is later redeemed, the full item value is counted as a sale" — in the month of redemption, not the month of purchase. |
| What you owe | Outstanding gift card balance | The total balance of cards sold or issued. Check the Ending gift card balance for the liability on a given date. |
| Expired cards | Still counted | An expired card's remaining balance continues to count toward your outstanding balance. |
| Deactivated cards | Removed | The remaining balance is set to zero and drops out of the outstanding balance from the deactivation date. |
| Cards you issue from the admin | Never a sale | They do not appear in the Net sales from gift cards report at all. |

Two rows are worth reading twice. The first is that a gift card sale is invisible to every sales report, which means a December dashboard systematically understates what the month brought in. The second is that an **expired card's balance keeps counting toward what you owe**, which surprises merchants who assume expiry clears the liability.

## What it does to the story you tell about January

The standard seasonal narrative runs: November is enormous, December is good, January is dead. The gift card mechanic punctures the third clause without needing a single industry statistic, because the reporting treatment guarantees that some of December's money shows up as January's sales.

Work it through on round numbers. Suppose December brings $500,000 of orders of which $40,000 is gift cards. Your sales reports show $460,000, because the gift cards are a liability rather than a sale. When those cards are spent, what gets counted is the **full value of the order they pay for** — Shopify's own example is a $20 t-shirt with $5 of it paid by gift card showing as $20 of sales — in whichever month the redemption happens, and that month usually looks thin in your reports.

![Timeline of a gift card sold in December and redeemed in January](https://cdn-web.joy.so/cdn/image/2026/10/fig-row12a-timing-8ca1e9.webp)

_Where a December card lands in your reports._

The conclusion is not that January is secretly strong. It is that a part of January's number was pre-sold, which changes what you should spend to defend it. A merchant who believes January is dead cuts the January marketing budget, which is the month a cohort of customers is walking in holding money that is already yours.

## The liability is readable, and most people never read it

[Shopify's finance reports give you the number directly](https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types/default-reports/finances-report). The **Outstanding gift card balance** report shows the total balance of cards sold or issued, and the **Ending gift card balance** gives you the liability at a chosen date. Read it at the end of December and again at the end of February and you have your own redemption curve, measured on your own customers.

That is worth more than any benchmark, and it takes two readings and a subtraction. It also tells you the one thing every article about gift cards asserts and none can support: how fast your customers actually redeem.

## Where the loyalty program touches this

Two places, and both are easy to get wrong because they sit on either side of the same card.

The first is the purchase. If your program awards points on a gift card sale, it is paying out against money that is not revenue yet, and the customer earning those points may not be the customer who eventually spends the card. The second is the redemption. Shopify treats gift cards as a payment method rather than a discount, and [Smile's guide to its Shopify order settings](https://help.smile.io/en/articles/4036177-update-order-settings-shopify) documents the consequence: they are **"never excluded from the rewardable order total"**.

Put the two together and a single $100 gift card [can generate points twice](https://joy.so/blog/loyalty-points-on-bundles-and-subscriptions/): once when it is bought and once when it is spent. Neither award is wrong on its own. Paying both, without having decided to, is [how a programme's cost drifts](https://joy.so/blog/loyalty-point-cost/) in a season when nobody is looking at it.

The same classification works in your favour elsewhere. Because a gift card is a payment method, it does not consume one of the five discount code slots on an order and it needs no combination settings, exactly like store credit, which [Shopify's guide to store credit](https://help.shopify.com/en/manual/customers/store-credit) also lists as a payment method. In a December cart that already carries a promotion and a reward, that is one less thing to go wrong.

## How much of December this actually is

Whether any of this matters to you depends on how much gift card volume you do, and the published numbers are larger than most merchants assume. [Shopify's guide to how gift cards work for retailers](https://www.shopify.com/blog/gift-cards-for-retail) cites NRF's finding that US shoppers were expected to spend about **$29 billion on gift cards** over the 2025 holiday season, the **second most popular gift**, with **43% of US shoppers** planning to buy at least one.

The format has also flipped. For the first time, two-thirds of consumers favour digital gift cards over physical ones, citing instant delivery (70%) and ease of sharing (51%), from Fiserv's 22nd Annual Prepaid Consumer Insights Survey, as reported in [Shopify's gift card guide for retailers](https://www.shopify.com/blog/gift-cards-for-retail). Digital delivery compresses the gap between purchase and redemption, and it puts an email address in your system at the moment the card is sent — which is the only part of this a loyalty programme can act on before the card is spent.

One reporting detail to get right before you measure any of it: cards you issue yourself from the admin, as compensation or a promotion, **never count as a sale and never appear in the Net sales from gift cards report** at all. [Shopify's finance reports guide](https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types/default-reports/finances-report) points you to an Issue method filter on the gift cards page to separate those from cards customers bought. Mixing the two is how a gift card programme appears to be growing when what grew was your goodwill budget.

## Three instruments that look alike and are not

Gift cards, store credit and discounts are all ways of putting value in a customer's hands, and they behave differently in every way that costs you money. Worth having the comparison in one place before the season.

|  | Gift card | Store credit | Discount |
| --- | --- | --- | --- |
| Who pays for it | The buyer, usually someone else | You, at issuance | You, at the moment of sale |
| Counted as revenue | On redemption, at full item value | Never — it is a payment method you funded | Immediately, as a reduction |
| Shows in sales reports when sold | No | Not applicable | Yes |
| Expiry | Has its own rules and shows in the outstanding balance even once expired | Set per issuance, with no store-wide default | Set on the discount |
| Uses a discount code slot | No | No | Yes |
| Needs combination settings | No | No | Yes |
| Reaches a guest checkout | Yes, with the code | No — signed-in customers or Shop Pay only | Yes |
| Earns loyalty points on the order it pays for | Yes, it is a payment method | Yes, it is a payment method | Depends on your earning base |

The row that decides most decisions is the last but one. A gift card reaches anybody holding the code, including a first-time visitor who will check out as a guest. Store credit reaches only customers who sign in. That makes the gift card the better instrument for acquisition and [store credit the better one for retention](https://joy.so/updates/shopify-store-credit/), which is the opposite of how most programmes use them.

The last row is the one that costs money quietly. Both gift cards and store credit are payment methods, so the order they pay for earns points at the full rate unless you have decided otherwise. A discount is the only one of the three whose treatment you actually control, through the earning base.

## Redemption is a contact point you get exactly once

When a gift card is redeemed, somebody is in your checkout who may never have bought from you, did not choose you, and arrived with money already paid. They are, in every sense that matters, a new customer — and the redemption is the one moment you are guaranteed to have their attention.

Most stores spend that moment on a receipt. The alternative costs nothing: enrol them. A loyalty program that captures the account at redemption turns a stranger spending somebody else's money into a member with a balance, and the balance is what [brings them back without a discount](https://joy.so/solutions/increase-repeat-rate/).

Whether that works depends on something you control: whether the checkout asks. We take the recipient side of this in its own piece later in the season, because the December redemption window is when it matters and because it is a different job from the one this page describes.

## What nobody can tell you about timing

There is a whole genre of content built on gift card redemption timing: what share is spent in the first month, the average number of days between purchase and redemption, how much of January's trade is gift-card-driven. We went looking for the primary source behind those numbers and could not reach one. They circulate through roundups that cite each other.

So this page will not give you a day count. The accounting mechanic is certain and checkable in your own admin; the timing is undocumented. Both of those statements are more useful than a confident number with no study behind it, because one of them you can act on and the other you cannot.

## What to decide before the season

Three decisions, all small, all cheaper now than in January. Whether a gift card purchase earns points, and at what rate. Whether an order paid with a gift card earns points, which you settle with one test order. And who reads the outstanding balance report, and when — because a liability nobody looks at is a liability that surprises somebody in February.

The mechanics that work on a loyalty base during the weekend itself are in our [BFCM loyalty strategies guide](https://joy.so/blog/loyalty-strategies-for-bfcm/), and the order of work for the weeks before it is in our [Black Friday checklist](https://joy.so/blog/black-friday-checklist/).

## Thirty seconds in your own admin

Open the finances reports, find the outstanding gift card balance, and write the number down. That figure is money customers have already given you for goods you have not yet shipped, attached to people who have a reason to come back and a date by which they will. It is the least exploited asset in a December trading plan, and it is sitting in a report most merchants open once a year.

## FAQs

### Why doesn't my gift card sale show up in sales reports?

Because Shopify does not treat it as one. Its documentation states that selling a gift card is a liability rather than a sale, so it is excluded from sales reports and from the total sales figure on the home analytics card. It shows up in the Net sales from gift cards report and in Payments.

### When does a gift card become revenue?

When it is redeemed. At that point the full item value is counted as a sale, in the period of redemption. A card bought on 20 December and spent on 8 January is January revenue.

### How do I see how much I owe in gift cards?

The Outstanding gift card balance report. For the liability at a particular date, read the Ending gift card balance in that report. Note that expired cards keep counting toward the balance, while deactivated ones do not.

### Does an order paid with a gift card earn loyalty points?

Generally yes, and for a documented reason: Shopify treats gift cards and store credit as payment methods rather than discounts, and Smile states that they are therefore never excluded from the rewardable order total. Check your own app, because this is the case where one order carries two costs.

### How quickly do people redeem gift cards?

Nobody can tell you from a published source. Every day count and percentage in circulation traces back to aggregators with no reachable primary citation. What you can do is measure your own: the outstanding balance report gives you the data to work out your own redemption curve after one season.

### Should the loyalty program reward a gift card purchase?

Think carefully. Rewarding the purchase pays out on money that is not revenue yet, and the same order may earn again when the card is redeemed. If your programme awards on both, you are paying twice for one piece of value.