Most salon owners assume gift cards are a quick way to bring in extra cash. The problem is that gift cards feel like income, but they are not income at all. In this post, I’m breaking down how gift cards actually work inside your books, why they impact your cash flow, and what you need to know before relying on them in your salon.Your future self will thank you for it.
Gift Cards Are Not Income
When you sell gift cards, the money lands in your bank account, but it does not count as revenue. Instead, gift cards show up as a liability, which means you now owe that client a future service. You won’t earn the revenue until the client redeems the card.
This surprises most salon owners because gift cards feel like money coming in today, but financially, it’s a loan you now owe. You’re promising future time, labor, and product long before you actually receive real income.
Why Gift Cards Create Cash Flow Confusion
The biggest problem with gift cards is timing. You have no control over when a client will come back to spend it. They might redeem it next week, months from now, or even years later. Because gift cards don’t expire, you’re relying on client behavior to tell you when you’ll earn that revenue.
This delay creates confusion in your cash flow. When salon owners treat gift cards like income, they think they’re more profitable than they are. Meanwhile, that money feels easy to spend because it’s sitting in the bank, even though you haven’t earned it yet.
The Hidden Cost of Discounted Gift Cards
Some salon systems offer promotions like “Buy a $100 gift card, pay $90.” On paper it sounds like a great way to attract new clients. In reality, discounted gift cards reduce your cash today while still requiring you to deliver the full service later.
This double hit is one of the most common money leaks I see when I’m working with salon owners inside The Profitable Salon Method™. Understanding how gift cards behave prevents these financial surprises.
Using Gift Cards the Right Way
I’m not saying to stop selling gift cards. They can be a great marketing tool and a solid way to retain clients. What I am saying is to use gift cards intentionally, not as a quick fix for a slow month.
Have a plan for when the revenue will likely come in. If you sell gift cards this month, assume only a portion will be redeemed in the next few months, and the rest may stretch out over a year or more. This protects your cash flow and helps you avoid relying on unearned money to cover today’s expenses.
Understanding how gift cards actually behave in your salon gives you clarity, control, and confidence in your numbers. Use them strategically. Your future self will thank you for it.
