Handle Gifts Given Away

To properly track retail items* (section 1) given as gifts, you can choose from a couple of options depending on whether the recipient is known when the gift is given away.

Option 1: Gifts Given to known Recipients

Keep the Type set as Sale and give a full 100% discount by putting 100 in the Disc% field. This way, the printed invoice will show the value of the item you're giving away. You'll also see the retail amount in the Gross Receipts report under Retail Subtotal, with the same offsetting amount listed under Discounts, which will lower the Net Total.

1. Create an invoice adding the items being given away.
2. Set the sale Type as Sale and enter 100 in the Disc% field. 
3. Add any other items and payment if necessary to finish the invoice, then click Save.

Tip! You can categorize the discounts you offer using various Discount Types and even create custom options.

Option 2: Gifts Given to Unknown Recipients

Refer to the article Handle Demos, Donations, or Expired/Product Loss for detailed instructions on how to manage situations where your business is giving away retail products for events like a raffle or a gift basket created by multiple consultants when the intended recipient is unknown. If the items are being donated to a charity, the process for handling the invoice is also similar.

1. Create an invoice under your Business Supplies profile with the invoice Sale type as Business Supplies.
2. Under the Discount section, ensure the discount type is set to Business Supplies. Then, from the Expense Category drop-down options, select the appropriate tax category.
3. Mark the invoice paid by clicking  in the Cash/Check field.
4. When finished, click Save.

Main Street can only provide general suggestions, not tax advice. Please consult your tax professional regarding your specific situation.

Suggested Expense Categories:

• Supplies (COG): Items used as section 1 demonstrators
• Gifts: Items for an event not tied to a specific recipient
• Advertising: Items used as a giveaway to obtain leads
• Charity: Items donated to a shelter or other charitable organization
• Expired/Lost: A product past its prime and being thrown out. Another use for this category would be products lost or damaged in shipment to a customer.

---

Additional Information:

Using the Gift sale type for retail items (section 1) will not include the retail amount of the item in the Retail Subtotal or Net Total on the Gross Receipts report. However, it will be included under Discounts. The Gift sale type was intended for supplies (section 2) being given as a gift with purchase (i.e., Deluxe Minis or other section 2 ).

See Handling Sales Tax on Discounted Items for more information about how tax is calculated when applying discounts.

* When adding section 2 items, the sale type will automatically default to Gift or Sample. Section 2 items are accounted for on the Product Purchases tax report and should not be separately entered as an expense.