Policy Summary
Gift cards are considered the same as cash by the Internal Revenue Service (IRS) and, therefore, are subject to tax reporting requirements. Depending on the intended use for the gift card, specific UW–Madison payment procedures must be applied.
Policy Detail
- Gift Cards as Prizes or Awards (Non-Institutional Review Board [IRB] Related): Gift cards may be purchased as prizes or awards using a UW–Madison purchasing card provided the following requirements are met:
- The intended gift card purchase is in alignment with the definition of a prize or an award in UW System Administrative Policy 330.
- Gift cards are purchased in amounts of $50 or less.
- Only one gift card is given to each recipient during a calendar year. Tracking is to be performed by the department.
- Gift cards are not to be given to UW employees (except in situations where the individual’s employment is incidental to the basis on which the gift card is given).
- Gift cards are not to be given to Nonresident Aliens (NRA). All payments to Nonresident Aliens (NRA) are to be made through a Payment to Individual Report (PIR) or Direct Payment (DP) due to immigration documentation and tax requirements.
- Additional supporting documentation to be retained with the vendor receipt:
- Pre-approval must be obtained from the Divisional Business Office via the Purchasing Card Gift Card Approval Form.
- Purchases on grant money must be pre-approved by Research and Sponsored Programs prior to submitting the form to the Divisional Business Office for final approval.
- The Gift Card Recipient Log is used to document the name and contact information of each gift card recipient.
- The individual making the gift card purchase is accountable for the safekeeping of the gift card(s) and accounting for any unused gift cards.
- Gift Cards may be purchased as Payments to Research Participants (Institutional Review Board [IRB]-Related) using the following two payment methods:
- Custodian Funds: All research participant studies are to be approved or an exemption formally documented and provided by the IRB. Refer to the UW-3012 Custodian Funds Policy and 3012.2 Temporary Fund Procedures for information on using gift cards to pay research participants.
- Purchasing Card: Gift cards may be purchased as payments to research participants using a UW–Madison purchasing card provided the following requirements are met:
- Gift cards are allowable up to the amounts provided in related grant agreements. A copy of this documentation supporting the amount of the gift cards purchased must be included with the Gift Card Approval Form when obtaining pre-approval and with the supporting documentation for the purchase.
- Gift cards are not to be given to Nonresident Aliens (NRA). All payments to Nonresident Aliens (NRA) are to be made through a Payment to Individual Report (PIR) or Direct Payment (DP) due to immigration documentation and tax requirements.
- Additional supporting documentation to be retained with the vendor receipt:
- Pre-approval must be obtained from the Divisional Business Office via the Purchasing Card Gift Card Approval Form. Purchases on grant money must be pre-approved by Research and Sponsored Programs prior to submitting the form to the Divisional Business Office for final approval.
- Grant agreement documenting allowable amount of gift card purchase.
- The Gift Card Recipient Log is used to document the name and contact information of each gift card recipient.
- The individual making the gift card purchase is accountable for the safekeeping of the gift card(s) and accounting for any unused gift cards.
Noncompliance
Gift cards may only be purchased with UW–Madison funds for the purposes described in this policy. Gift cards for any other purpose or gift cards purchased via alternate payment procedures/mechanisms are not payable or reimbursable by the university.
Responsibilities
- Purchasing cardholders – Responsible for reading, understanding, and adhering to this policy.
- Divisional business office staff – Responsible for reviewing and approving Purchasing Card Gift Card Approval Forms and the purchase of gift cards.
- Research and Sponsored Programs – Responsible for reviewing and approving Purchasing Card Gift Card Approval Forms and the purchase of gift cards on sponsored funding.
- Purchasing Card Program Office – Responsible for:
- Developing and maintaining internal policies and procedures.
- Developing, training and supports purchasing cardholders, site managers, and divisional business offices with purchasing card-related questions and concerns.
- Performing periodic reviews of card activity to ensure compliance with policies and procedures.
