Gift cards are cash-like instruments used in lieu of cash or check. In this document, the term “gift card” is used to mean both gift cards and gift certificates unless specified otherwise.
The following procedures cover the requirements for use (purpose), approval, purchase, accounting, tax reporting, and safeguarding of gift cards.
Gift cards may also be used by campus development staff as gifts in accordance with the PSC Procedural Statement Sensitive Expenses. Both of the following conditions must apply: (1) the gift cards are being purchased using Fund 36 SpeedTypes, and, (2) the gift cards are being given for reasons of donor cultivation, solicitation, and stewardship. In these cases, the following procedures do not apply.
Gift cards may be used as payment to study subjects or as recognition of employees and other individuals. Gift cards should be considered for use only after a careful review of the Administrative Policy Statement Propriety of Expenses, including the several Tests of Propriety. Furthermore, the use of gift cards must be in compliance with the Procurement Service Center (PSC) Procedural Statement Sensitive Expenses and - as appropriate - with the PSC Procedural Statements Study Subject Payments or Recognition and Training.
Gift cards may not be used for any reason other than their originally stated purpose. Gift cards for differing projects or purposes must be kept separate throughout the procedures outlined in this document.
Gift cards may notbe used to issue student academic awards. All student awards must be processed through the respective campus financial aid office for purposes of student financial aid tracking requirements and through the campus bursar’s office for tax reporting purposes. Students may, however, receive gift cards as compensation for participation in a study since compensation payments do not affect financial aid.
Study subject payments accomplished via gift card must be $100 or less. Study subject payments of more than $100 - and study subject payments in any amount that are being made to non-resident aliens - may not be made through gift cards but must be issued via Study Subject Payment (SSP) forms.
Recognition payments accomplished via gift card - or via any payment method - are further restricted by the PSC Procedural Statement Recognition and Training according to the type and dollar amount of the award.
The purchase of gift cards must be approved in advance by the respective campus controller’s office (campus finance office). Turn-around time for review of requests is typically two weeks.
All gift card purchases must be authorized via the Request for Gift Card Purchase Authorization form and accompanied by the Statement of Responsibility. Additional documentation requirements for study subject payments and for recognition awards, rewards, and prizes are presented in the respective PSC Procedural Statements. See also campus-specific policies and procedures.
Gift cards may be purchased using Procurement Card or a purchase order in the Marketplace.
The expense for gift cards purchased in order to pay study subjects should be recorded as a debit to Account 495102 Study Subjects.
The expense for gift cards purchased in order to pay for recognition awards, rewards, or prizes should be recorded as a debit to Account 550108 Non Cash Participation/ Recognition Non Employee.
Study subject payments are considered compensation for time and inconvenience and are therefore treated as taxable income to the recipient per the Internal Revenue Code: this is regardless of the payment method or amount. See the PSC Procedural Statement Study Subject Payments for additional information regarding tax reporting.
Recognition awards, rewards, or prizes made via gift card are generally tax reportable. See the PSC Procedural Statement Recognition and Training for additional information regarding tax reporting.
Internal Controls over gift cards are required at all times. Each organizational unit must have written procedures in place that provide for the proper safeguarding of gift cards. The following internal controls at a minimum must be addressed and in place:
For each purchase, a single individual must be the designated custodian of the gift cards. This individual will be responsible for ensuring that all purchasing, security, dispensing, tracking, and replenishing procedures are followed. Contact the campus finance office to permanently change designated custodian.
Custody may be transferred temporarily from the designated custodian to other departmental personnel. A receipt acknowledging the transfer of responsibility should be prepared, signed, and dated by both parties stating that the recipient agrees to be held accountable for the safeguarding of the gift cards and will dispense the payment in accordance with the business purpose of the clinical trial, protocol, survey, or recognition event. Each party to the agreement should receive a copy of the agreement, and a copy should be kept with the inventory. This process will ensure that responsibility rests with a single individual at any point in time.
Gift cards must be secured at all times (e.g. in a locked box in a locked cabinet or drawer.)
Gift card issuances should be documented by a pre-numbered receipt book or equivalent method, such as a log, designed to uniquely identify each payment in order to document the appropriate use of the card for audit purposes. Standard receipt books are a two-part form available at office supply stores. Information to be included for each card shall include at a minimum:
If a serialized receipt book is used, the custodian must also keep an electronic log (e.g. spreadsheet) of gift card purchases and disbursements for audit purposes. This log must tie the above receipts (e.g. by receipt number and/or card number) to the purchases of gift cards recorded in People Soft (e.g. by journal ID). This log will be used by the Finance Office to audit the accuracy and adequacy of the gift card recordkeeping. This is particularly critical in demonstrating that the gift cards are reasonably allocable to a grant.
Before voiding gift certificates, contact the vendor for related conditions and refund procedures. Any voided gift certificates need to be defaced and sent to the departmental administrator who is not the custodian of the gift certificates. This process will independently confirm that voided incentive gift certificates are in fact voided and not converted to unauthorized use by the custodian. Any refund monies received from the vendor shall be deposited immediately to the appropriate SpeedType against the expense.
The value of receipts and gift cards must total the authorized amount approved by the campus finance office. Employees are held responsible for any gift cards in their possession that are lost or misplaced. Any shortage must be reported immediately to the campus finance office and the campus police department.
A periodic reconciliation of gift cards should be conducted every time gift cards are purchased or on at least a monthly basis. This reconciliation should consist of verifying that the number of cards purchased minus the number of cards disbursed agree to the number of cards on hand. In addition, the value of the cards purchased should agree to the amount recorded in PeopleSoft. The inventory needs to be performed by an individual who is not responsible for the issuance or custody of the gift cards while in the presence of the custodian.
The campus finance office will periodically audit records related to gift cards, including:
For changes to gift card custodian, SpeedType, or amount - or to close a gift card program - contact the campus finance office for further instructions.