University of Akron - Gift Card Policy/Procedures
Objective:
To provide policies and procedures on the purchase, distribution, tracking and accounting for gift cards and gift certificates.
Policy Statement:
Gift Card purchases are permitted provided the expense is reasonable and necessary to carry out the mission of the University. Gift cards, regardless of the value, are considered cash equivalents by the Internal Revenue Service and are subject to tax reporting. Departments purchasing and distributing gift cards are responsible for compliance with IRS regulations and university policies.
Definition:
For purposes of this policy, "gift card" is defined as a stored-value or similar instrument issued in lieu of cash or check, including, without limitation, a gift certificate. As a cash-equivalent instrument, gift cards are governed by tax rules and internal control requirements.
WHEN GIFTS CARDS MAY BE PURCHASED:
The value of an individual gift card shall not exceed $100.00 per card. Gift cards greater than $100.00 must have prior approval from the Controller’s Office.
Gift cards may be purchased for/under the following individuals or circumstances:
a. Event volunteers
b. Sponsored project participants
c. Outreach participants
d. Door prizes / contest winners
e. Survey participants Gift cards issued to students for emergency situations may be purchased and distributed only by the ZipAssist Office.
Gift cards issued to students for emergency situations may be purchased and distributed only by the ZipAssist Office.
Sponsored Projects:
Use of gift cards for sponsored project participants
a. The use of gift cards as incentives or awards of externally funded sponsored project participants must be described in the grant proposal. If the gift card was not described in the grant proposal, the purchase of a gift card on a sponsored project requires prior written approval from the sponsor. If prior approval is not obtained, the gift card purchase is not allowable on the grant. Additionally, when conducting human subjects research the protocol must be submitted to and approved by the Institutional Review Board and the informed consent of participants must be sought and documented.
b. The use of gift cards as incentives for department research not funded by an outside entity should be described in a descriptive narrative, protocol or publication. The document must specify that gift cards to be used as incentives will be purchased in the appropriate dollar amounts from a specified vendor or vendors. When conducting human subjects research, this document must be submitted to and approved by the Institutional Review Board and informed consent of participants must be sought and documented.
When Gift Cards May NOT be Purchased:
Gift cards may NOT be purchased for University specifically identified active employees, students (undergraduate and graduate students, and post doc research associates), researchers or consultants employed by the University. For example, a department may not purchase a gift card/certificate for an employee for achieving specific employment milestones.
• Gift cards may NOT be purchased as gifts for graduating students.
• Gift cards may NOT be purchased as a holiday bonus or other gifts to employees or students.
• Gift cards may NOT be purchased to pay suppliers and consultants for goods and/or services received.
Purchasing Gift Cards:
-Gift cards may be purchased through the Zip Card Office.
-Gift cards may be purchased with a quote through the purchase order process.
-Gift cards may be purchased with a University P-Card with the pre approval of the Purchasing Department.
Tax Implications:
If the combined total value of gift cards received and compensation for services rendered exceeds $600 in any calendar year for a non-employee, a form 1099-MISC will be issued. If the gift recipient is a United States citizen, he/she will be required to complete a Form W-9, and the department will forward the completed W-9 to Accounts Payable along with the amount of the gift card given. If the gift card recipient is a foreign national or non-resident alien, he/she will be required to complete a form W-8BEN, and the department will forward the completed W-8BEN to Accounts Payable along with the amount of the gift card given.
Research Trial Participants:
Departments must inform all research participants that the value of any gift cards they receive for research participation is taxable income. The departments must keep records of all remunerations, including gift cards, provided to each research participant. If the amount exceeds $600 within a calendar year for any individual, the department must collect a Form W-9 from that individual and report this information to the System Accounts Payable office for Form 1099 reporting. Research participants who are also university employees will be treated the same as non-employees provided the following conditions are met:
a. The employee’s participation is voluntary and not part of the employee's official university duties;
b. The employee’s participation is on the employee's own time;
c. The employee does not perform any service while participating in the research study that would be performed in the course of the employee's regular university responsibilities: and
d. The employee is not receiving additional benefits when compared to the other participants. If any of these conditions are not met, any payments to the employee must be reported to the Payroll Office so that these payments will be included on the employee’s W-2 and applicable taxes will be withheld.
Tracking
a. Gift card activity shall be documented by the department so that the physical number and value of cards in the custodian’s possession matches the balance of gift cards documented on a log, receipt book, or equivalent method of documentation.
b. The method of tracking gift cards should record the following information:
i. Recipient name or in the case of anonymous of confidential human subject participants, the participant ID number
ii. Date of distribution
iii. Signature of Principal Investigator or department head authorizing disbursement to recipients
iv. Purpose of payment
v. Serial number of the gift card vi. Amount of gift card vii. Signature or initials of study participant or recipient, if available
c. Alternate method of record keeping for anonymous and confidential surveys – for anonymous surveys and confidential research participants, the department must maintain a reconciliation of the number of cards given equaling the number of surveys or participants. This reconciliation process must be approved by the Controller’s Office.
d. Alternate method of record keeping for mailed and electronic gift cards – For mailed and electronic gift cards, the department must maintain a reconciliation of the number of cards given equaling the number of surveys or participants. This reconciliation process must be approved by the Controller’s Office.
Distribution:
The individual assigned the responsibility of distributing the gift cards should not also be assigned the responsibility of tracking and reconciling gift cards.
Custody and Security Gift cards require the same level of security as cash.
Approval and Limits The purpose and purchase of gift cards outside this policy must be pre-approved by the Chief Financial Officer (CFO) or his/her designee due to the fact gift cards are the equivalent to cash and can have income tax implications. The value of an individual gift card shall not exceed $100.00 per card.
Zip Card Office Zip cards will have an expiration date not to exceed one year.