Understanding the difference between credits, gift cards, and cash back helps ensure your team gives guests clear, consistent information. Open offers multiple ways to reward, compensate, and engage customers, and each works a little differently. This guide explains how each value type is issued, how it's redeemed, and how it impacts your restaurant.
🌟 Quick Definitions
Gift Cards
What it is
Prepaid stored value purchased by a guest or issued by the restaurant.
How it's issued / earned
Purchased online, in-app, or in-store
Online/App purchases (through Open): Tied to a specific store at purchase
In-store POS purchases (Toast/Square): NOT tied to a store in Open's system (handled by POS provider)
Where it can be used
Open Online/App ordering In-Store
How redemption works
Redeemed towards the bill:
Can cover all or part of an item
Works like a typical prepaid card
Can cover tax, tip, and fees
How liability works
Online/App Purchases (through Open):
The selling store receives the gift card amount (minus card processing fees) in their next scheduled payout
The store tied to the payout is based on the store the customer selected at the time of purchase
In-Store POS Purchases (Toast/Square):
Gift card purchases made through the POS are not tracked at the store level in Open's system
The money flow for these is handled entirely by the POS provider
Open only syncs the gift card balance for redemption tracking
Restaurant Issued (manually through Open):
When a restaurant manually issues a gift card, no store is credited
The merchant is essentially giving away value for free (e.g., for customer support or marketing)
When redeemed, the redeeming store will still be debited
At Redemption:
The redeeming store has the gift card amount deducted from their payout
This is because the selling store was already paid when the gift card was purchased
Example: If Store A sold a $50 gift card and a customer uses it at Store B, Store B's payout is reduced by $50
Credits
What it is
Dollar-value adjustments manually issued for support, marketing, or operational reasons.
How it's issued / earned
Customer support
Marketing promotions
Operational adjustments
Not tied to any store when the customer uses them
Where it can be used
Open app
Open online ordering
How redemption works
Can cover all or part of an item or order
Can cover tax, tip, and fees
How liability works
When credits are issued:
If the merchant/store is paying: The store's payout balance is debited immediately at issuance (not when the customer uses them)
If Open is paying (e.g., Open support or Open-funded promotions): No store is debited — Open absorbs the cost
At Redemption:
No additional liability is created at the redeeming store
The credits were already paid for when they were issued
Example: If a merchant issues $10 in credits (merchant-paid) and the customer uses them at Store B, the issuing store was already debited $10. Store B's payout is unaffected by the credit redemption.
Cash Back (Loyalty)
What it is
Automatically earned loyalty dollars (ex: 10% back) or marketing, or manually issued for support or operational reasons. Branded at the restaurant level.
How it's issued / earned
Earned automatically on eligible orders
Not tied to any store when earned
Where it can be used
Open app
Open online ordering
In-store
How redemption works
Cash back can only be used for full items.
Guest must have enough to cover the entire price of an item
Cannot partially pay for an item
Different from credits and gift cards, which apply to the order total and can cover partial amounts
Since the item is fully discounted, tax and service fee on that item are $0 (tip is still optional)
How liability works
At Redemption:
The redeeming store's payout is reduced by the loyalty discount amount
This happens at the time of redemption (when the order is completed)
Example: If a customer earned $5 cash back from Store A and redeems it at Store B, Store B's payout is reduced by $5
Note: The store where points were earned is not affected — only the store where points are redeemed bears the cost.
🧾 Summary Table
Feature | Gift Cards | Credits | Cash Back |
How it's created | Purchased or issued as a GC | Manually issued | Automatically earned, Manually issued |
Tied to a specific store? | Online/App: Yes; In-store POS: No | Depends on how issued | No |
Where it can be used | App, Web, In-store | App, Web | App, Web, In-store |
How restaurant is charged | Online purchase: Selling store credited, Redeeming store debited. Manual issuance: No credit, Redeeming store debited. In-store POS: Handled by POS, Redeeming store debited | If merchant pays: Issuing store debited at issuance. If Open pays: No store impact | Redeeming store debited at use |
When is payout affected? | Online purchase: At purchase (+) AND redemption (-). Manual issuance: At redemption only (-). In-store POS: At redemption only (-) | At issuance only | At redemption only |
Can guest gift it to someone? | Yes | No | No |
💸 Payout Impact Examples
Gift Card Example (Online/App Purchase)
Customer buys $50 gift card online at Store A
Store A's next payout: +$50 (minus ~3% card processing fee)
Customer spends $50 gift card at Store B on a $50 order
Store B's payout for that order: $0 (the $50 order value is offset by the $50 gift card deduction)
Gift Card Example (Manually Issued by Restaurant)
Restaurant manually issues $50 gift card to a customer (e.g., for customer support)
No store is credited — the merchant is giving away value
Customer spends $50 gift card at Store B on a $50 order
Store B's payout for that order: $0 (deducted by $50 gift card redemption)
Net merchant impact: -$50 (absorbed as cost of customer support)
Credit Example (Merchant-Paid)
Merchant issues $10 credit to a customer for a complaint (charged to Store A)
Store A's next payout: -$10 (debited immediately)
Customer uses $10 credit at Store B on a $25 order
Store B's payout for that order: ~$15 (they receive the portion paid by card, unaffected by the credit)
Cash Back Example
Customer earns $5 cash back from orders at Store A
Store A's payouts: Unaffected by points earned
Customer redeems $5 cash back for a free item at Store B
Store B's payout for that order: Reduced by $5 (loyalty discount)
💡 Tips
Gift Cards + Credits can cover partial items and amounts
Cash Back can only cover full items
Gift card redemptions always reduce the redeeming store's payout (regardless of where it was purchased)
For in-store POS gift card purchases, the selling store's payout is handled by the POS provider (Toast/Square), not Open
Credit redemptions do NOT reduce the redeeming store's payout (issuing store was already debited)
Cash back redemptions reduce the redeeming store's payout