Gift Certificates should apply as part of Total Paid on orders

[shane_peery]

Issue:

When applying a gift certificate to an order, Magento doesn't currently see that as a payment on the order.  It's applied as more of a discount as far as order totals are concerned.  Since most OMS / ERP applications look at gift certificates as a payment instrument this can cause unneeded customization.  See the attached screenshot for more information.

Solution:

Apply the gift certificate as a payment instrument and list it as a part of the Total Paid on an order.

Example 

[Robert Rand]

It's a really good point.

Applying gift card balances as promotional discounts instead of as a form of payment can cause bigger problems than integration workflows with ERP, Accounting, and other software systems

. 

For instance, I've seen Magento Extensions where this caused sales tax collection problems. 

Here's the general problem:

When a gift card is purchased, that purchase is generally non-taxable. A gift card is basically a form of currency. You don't pay sales tax for loading up money on your debit card. It's not a traditionally taxable item... nor should it be. 

Why not? Well, because until the recipient chooses the items they'll use this currency for. You don't actually know the sales tax implications. Let's say that you sell food and beverages. Perhaps the shopper will purchase alcoholic beverages, which will be at a higher tax rate.

Another example is clothing in New York. Clothing and footwear costing $110 or more per item are taxable. Less expensive items are not taxable. So a designer purse a shopper selects may be taxed, but the matching wallet may not be. 

If you charged sales tax at the sale of the gift card, and at the sale of the purchase of the goods, you'd be over-taxing the consumer. 

If you charged sales tax at the time the gift card was purchased, but through the use of promotions didn't charge it when they were buying goods with the gift card, you may not be taking into account the goods that they're ultimately buying.

Additionally, applying gift cards as promotions can also conflict with other promotions, such as by reducing the subtotal - which a gift card shouldn't. A gift card is a form of payment, not a discount. Luckily, in your image, the gift card does not appear to be impacting the subtotal, so that's a plus.