Accounting for vouchers: how should Swiss companies handle VAT and bookkeeping?

Vouchers can be used to reward customers or as giveaways for marketing purposes. It is important for companies who regularly use vouchers to understand their correct accounting and VAT treatment, as well as the legal validity and expiry of vouchers.

This guide explains the distinction between value and service vouchers, their VAT treatment, limitation periods under Swiss law, and the financial impact of unredeemed vouchers.

Vouchers are one of the most effective customer loyalty tools available to Swiss businesses. They generate immediate cash flow, reduce product returns, and encourage higher spending. Additionally, a portion of vouchers are never redeemed at all, creating pure profit for the issuer.

Vouchers have become increasingly popular in recent years and represent a growing market. According to Research and Markets, the Swiss gift card and voucher market was valued at approximately USD 1.76 billion in 2024 and is forecast to reach USD 2.48 billion by 2029, growing at a CAGR of 6.9%. They are valuable tools for customer loyalty that offer businesses numerous advantages. But what makes vouchers special, and why have they become so popular?

Earlier liquidity through pre-financing

An important advantage of vouchers is that they enable earlier liquidity for the seller, as they are only redeemed later. Vouchers that are sold generate immediate revenue without needing to provide anything in return at that point.

Fewer exchanges

Many vouchers are bought as gifts, as they make it easier to avoid giving the 'wrong' thing and are easier and simpler for the gifter. This effect is advantageous for retailers: due to the free choice for the recipient of the voucher, there are fewer product exchanges, which saves the retailer time and costs.

Increased willingness to buy

Vouchers also have a purely psychological effect: the voucher recipient becomes increasingly willing to spend more since they feel they do not have to pay for the product themself. In many cases, they may even spend more than the value of the voucher, as the additional difference feels like little compared with the total cost.

"Slumber money" potential

There will always be a proportion of vouchers that are never redeemed, the effects of which should not be underestimated. This "dormant money" is highly profitable for businesses and should also be accounted for. According to US industry data, between 10% and 19% of gift card balances remain unredeemed at any given time, and roughly 6% are never used at all. The situation is likely similar in Switzerland.

This must be taken into account in the bookkeeping, as according to the Code of Obligations, the amount of unredeemed vouchers may only be booked as income after the expiry of the limitation period. Until then, unredeemed vouchers must be carried as liabilities on the balance sheet.

The VAT treatment depends entirely on the voucher type. For value vouchers, VAT is due only at redemption. For service vouchers, VAT is due at the point of sale because the payment is treated as an advance for a specific, pre-defined service.

The VAT liability in the case of a value voucher only takes place when it is used or redeemed. Therefore, the VAT must only be accounted for at the time the service is received or the voucher is redeemed.

In contrast, the sale of service vouchers is an advance payment for a specific service. Therefore, the tax liability arises at the time the voucher is issued for the specific service or when the payment for the voucher is received.

Under Swiss law, voucher validity is governed by the general limitation periods in the Code of Obligations. Vouchers for everyday goods and services (e.g. restaurant meals, retail purchases) are subject to a five-year limitation period, while those for larger services (e.g. hotel stays, travel) are valid for ten years.

Those who own a voucher usually want to have as long as possible to redeem it. But how long is a voucher valid? The type of voucher determines its characteristics.

According to the law, vouchers for smaller servicessuch as books, food, clothes or restaurant visits expire after 5 years. (Art. 128 CO).

For larger services such as a weekend in a hotel or a trip, the law provides for a limitation period of 10 years. (Art. 127 CO).

Art. 129 CO prohibits the contractual shortening of these statutory limitation periods, so any expiry date printed on a voucher that is shorter than the legal minimum may not be enforceable.