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ROWAN UNIVERSITY POLICY

Title: Gift Card Policy
Subject: Finance
Policy No: FIN:2020:01
Applies: University-wide
Issuing Authority: President
Responsible Officer: Senior Vice President for Finance and CFO
Adopted: 10/01/2020
Last Revision: 07/

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26/2021
Last Reviewed: 07/

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26/2021

I.    PURPOSE

To establish guidelines for the procurement, distribution, accounting, and reconciliation of gift cards to meet the needs of the University community while facilitating the University’s tax compliance reporting and internal cash control requirements.  The purchase and use of such items requires strict accountability – gift cards may only be used for prizes and awards or to compensate human subject research participants.

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1. 1. The University pays business expenses by using appropriate Procurement methods (refer to the procurement and accounts payable policies listed in section V. References).  Gift Cards may not be used to pay vendors or research collaborators for goods and/or services received and/or rendered or pay any type of wages for services rendered. For example gift cards may not be used to pay University suppliers, independent contractors, guest speakers, consultants, honorariums or stipends at any time.  As such, gift cards should only be used as stated in this policy.
   2. Employees may not be reimbursed for out-of-pocket purchase of gift cards without prior approval via the Gift Card Request Form. However, if the employee incurs out-of-pocket gift card purchases the following is required: Non-PO Payment Request Form, Gift Card Recipient Log, Gift Card Payment Acknowledgment, justification stating reason and validation of the allowable business expense for last minute urgent needs, emergency purchases, etc. In addition, the Non-PO Payment Request Form will require an additional layer of approval by one of the following: Provost, Sr. Vice President and CFO, Sr. Vice President or appropriate Divisional Vice President to be considered for possible reimbursement.
   3. University places strict restrictions concerning the purchase and distribution of gift cards. Therefore, gift cards may only be allowed in situations where it is determined that the expenditures are in the best interest of the University and promote the overall mission of the University. For example, gift cards may be utilized:
      1. As an incentive to encourage participation in Rowan University research studies, as authorized by the IRB.
      2. Prizes or awards, with prior approval from the requestor’s Dean or AVP.
   4. The determination of whether a gift card is an allowable prize or award is dependent upon the selection of the recipient, the reason for the distribution and the recipient’s affiliation to Rowan University. For example:
      1. Gift cards/gift certificates may not be purchased with university funds for the purpose of giving an employee or student worker compensation for work or education related activities (e.g. gift, bonus, incentive, reward, expression of recognition, special occasion, social function or meals) outside of participation in IRB-sanctioned research.
      2. When the incentive to encourage participation involves enrolled students, the department should utilize the RowanCard system instead of a gift card when feasible.
   5. The University must comply with Internal Revenue Service (IRS) regulations as it pertains to gift cards and gift certificates at all times. Under Internal Revenue Code Section 132, a gift card, gift certificate, store-value card, or a prepaid credit card, collectively referred to as a gift card, is considered a cash or cash equivalent that is subject to taxes regardless of the face value.  The value of gift cards given to non-employees is taxable and reportable income on IRS form 1099 if the value of gift cards plus any other non-W2 compensation received by an individual from the University as a whole aggregates to an amount of $600.00 or more per calendar year. If an employee or student worker participates in IRB-sanctioned research, the value of the gift card distributed will be added to their W-2 for tax reporting purposes. As such, pertinent information must be collected from the recipient (recipient’s full name, TIN, address) prior to distribution of the gift card. The following forms must be completed and submitted to giftcards@rowan.edu:
      1. Gift Card Request Form
      2. Gift Card Recipient Log
      3. Gift Card Payment Acknowledgment
   6. Any and all collection of an individual’s social security number/TIN by the custodian/study coordinator is kept secure. Physical information is kept locked in a cabinet with access restricted to the custodian/study coordinator. Electronic information is stored on a secured server and is not stored nor maintained on a local desktop, laptop or other electronic device.
   7. Gift card face values are limited to the denominations authorized by an approved IRB study, or $100.00 per card for gift cards procured for gifts or awards outside of the IRB approval process. Payment must be made by Accounts Payable via Banner for amounts greater than $100.00 per participant.
   8. Principal Investigators are responsible for ensuring that human subject research participant payments are being processed through the ClinCard system and managed according to this policy.
   9. Gift cards outside of the ClinCard system held by a custodian/study coordinator should not exceed $2,500.00 at any one time. If more than $2,500.00 worth of gift cards are required at any given time, additional authorization is required by the Controller.
   10. The authorized Gift Card Request Form must be submitted to giftcards@rowan.edu at least two weeks prior to the requested gift card delivery date.
   11. All gift cards are to be distributed within a reasonable time once received:
       1. Gift cards procured as allowed by an IRB-sanctioned research study, unless pre-authorized by Finance.
       2. One month for gift cards procured for gifts or awards outside of the IRB approval process.
   12. Failure to follow this policy and procedure and to maintain appropriate supporting documentation can result in the suspension of the privilege to procure and distribute gift cards.
   13. Rowan University may terminate the use of gift cards at any time. Termination of the use of gift cards may result from, but is not limited to: abuse, failure to follow the policy and guidelines, use of gift card funds for personal reasons, or lack of funding.
2. Tax Limitations for Gift Cards:
   In order to ensure University compliance with the laws and regulations requiring tax reporting for certain payments to individuals, the following rules must be followed when distributing gift cards:
   1. If the employee or student worker participates in IRB-sanctioned research, the value of the gift card will be added to their W-2 for tax reporting purposes.
   2. The value of gift cards given to non-employees is taxable and reportable income on IRS form 1099 if the value of gift cards plus any other non-W2 compensation received by an individual from the University as a whole aggregates to an amount of $600.00 or more per calendar year.
   3. Gift cards, regardless of value, may not be given to anyone considered a non-U.S. person for tax purposes.
   4. The custodian/study coordinator is responsible for submitting all supporting documentation when utilizing all other gift cards. The supporting documentation should include, but is not limited to, the Gift Card Recipient Log and the Gift Card Payment Acknowledgment. These forms should be sent to Accounts Payable within 30 days of distributing the gift cards (but no later than January 5^th for all gift cards distributed in the month of December, due to the timing of IRS Form 1099 reporting).
   5. A waiver of tax compliance obligations (collecting names, TINS, and addresses) may be pre-authorized by General Counsel with a formal request made only from Finance in rare instances where the study is based on populations in which there is no reasonable collectability of this required information – i.e., homeless populations, undocumented immigrants, adults with severe intellectual disabilities. This waiver authorization is dependent on the targeted population of the study, the limited dollar amount of the compensation associated with the study, the ability to exclude University employees or students, and must be requested four weeks in advance to allow for multiple levels of review and authorization. This waiver will not be granted retroactively.
3. Authorized Methods for Purchasing Gift Cards:
   Only the following gift card purchasing options are available upon approval of the Gift Card Request Form. ClinCard is the University’s preferred method of purchasing gift cards. All other gift card purchasing methods will be reviewed to determine if ClinCard is more suitable.
   1. ClinCard
      1. ClinCard – The University has partnered with ClinCard in order to facilitate a secure electronic method of collecting participant information and distributing payments. The ClinCard payment mechanism provides prompt and efficient payment to individuals once approved by Finance. Approved payment can be immediately accessed by the recipient to be used as a pre-loaded electronic (virtual) Visa card or Visa card (physical). By centralizing the recipient payment through ClinCard, the University can streamline its processes in order to operate in compliance with Internal Revenue Service (IRS) reporting regulations. Additionally, the ClinCard system will increase security and decrease liability to both the University community and recipients by eliminating the use of the paper based process. Furthermore, ClinCard is the University’s preferred method of purchasing gift cards.
         Note: See Attachment 2 for procedures.
   2. Other Gift Cards
      1. TD Bank – The University has an arrangement with TD Bank to be able to provide departments with another solution for receiving physical gift cards to distribute to recipients. Unless otherwise pre-approved by Accounting Services, TD Bank Visa gift cards are the University’s preferred method outside of ClinCard.
      2. Amazon – The University has an arrangement with our Amazon account to provide departments with a flexible solution for also receiving electronic gift cards. Primarily when research is required to be performed remotely and Accounting Services has determine that ClinCard is not a viable option.
      3. Other Vendors – Gift cards required to be procured from a vendor other than TD Bank will require supporting justification and pre-approval from Finance.
         Note: See Attachment 3 for procedures.
   3. Please note, the required authorization on the gift card request form is as follows:
      1. IRB sanctioned studies will require documentation of the IRB sanctioned study noting the approval of the study.
      2. Gift cards purchased with external grants will require authorization from the Grants and Contracts Accounting Director noting the allowability of the expense against the grant funds.
      3. Gift cards purchased outside of an IRB sanctioned study will external grants require the authorization of the requestor’s Dean or AVP.
      4. The Gift Card Request Form will require final authorization by the Finance Division.
4. Non-Allowable Gift Card Purchases:
   The following gift card expenditures are prohibited:
   1. Gift cards/gift certificates may not be purchased with university funds for the purpose of giving an employee or student worker compensation for work or education related activities (e.g. gift, bonus, incentive, reward, expression of recognition, special occasion, social function or meals).
   2. Gift cards/gift certificates may not exceed the denominations authorized by an approved IRB study, or $100.00 for gift cards procured for prizes or awards outside of the approval process. Payment must be made by Accounts Payable via Banner for amounts greater than $100.00 per participant.
   3. Gift cards may not be used to incentivize participants in human subject research studies unless pre-authorized by the IRB.
   4. Gift Cards may not be purchased through the University’s Barnes and Noble account.
   5. Gift cards may not be purchased using the University’s Procurement Card system.
   6. Employees may not be reimbursed for out-of-pocket purchase of gift cards. Reimbursement for out-of-pocket gift card purchases may be denied if proper justification and approval by one of the following: Provost, Sr. Vice President and CFO, Sr. Vice President or appropriate Divisional Vice President were not obtained in advance. 
   7. Gift Cards may not be used to pay vendors for goods and/or services received and/or rendered or pay any type of wages for services rendered. For example gift cards may not be used to pay University suppliers, independent contractors, guest speakers, consultants, honorariums or stipends at any time.
   8. Gift cards may not be purchased as gifts to graduating students.
   9. Gift cards may not be used to compensate collaborators in a research study.

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