This page provides a high-level purchasing overview for gift cards. Always consult policy before making this type of purchase.
- Appropriate Gift Card Purchases
- Acceptable Purchasing Methods
- Gift Cards and Use/Sales Tax
- Expiration Dates
- Commodity Code Adjustment for Gift Card Purchase
- Relevant Policies
Gift cards can be presented on behalf of the university to its employees for work-related awards:
- Employee recognition ($75.00 or less per award)
- Length of service ($400.00 or less per award)
- Retirement ($400.00 or less per award)
Gift cards presented to employees as recognition awards must be given infrequently.
NOTE: If purchasing gift cards for award/prize presentation to students who are receiving any type of student aid, you should first consult with Undergraduate and Prestigious Scholarships at email@example.com or 530-752-2804 to discuss the proper reporting requirements.
Exception Gift Card Approvals
Non-cash awards exceeding the amounts above require a written exception approved by the Assistant Vice Chancellor - Controller. There may be income tax implications when the value exceeds the amounts listed above.
The following are among the unallowable uses of gift cards:
- Taxable awards (e.g., length of service or retirement awards in excess of $400.00)
- Honoraria payments
- As an "alternative" purchasing method that bypasses policy
Departments that recognize isues with past gift card purchases should contact Robert Fischer in order to make any necessary corrections (e.g., tax reporting) and discuss ways to prevent similar purchases in the future.
The preferred method of purchasing gift cards is in AggieBuy, using the Amazon or National Gift Card Corp (NGC) catalog, available from the punch-out suppliers section of the AggieBuy home page. With the Amazon and National Gift Card catalogs, you can purchase either tangible gift cards, or electronic gift cards ("ecards"), where an access code allows the recipient to use the virtual gift card for purchases.
Visa and American Express cards are assessed a card fee, while retail cards are not. Visit the State of California Department of Consumer Affairs website to learn more about the rules and regulations of gift cards used in California and when (and not) fees can be charged.
- Gift cards purchased through Amazon are eligible for free shipping.
- NGC gift card orders add a flat $7.65 Shipping charge that will be displayed in your AggieBuy shopping cart in AggieBuy. If purchasing from the NGC catalog, it's recommended that you purchase multiple gift cards at one time to minimize shipping costs, OR purchase electronic gift cards ("ecards") in lieu of a tangible card.
Note: At this time, the gift cards purchased through AggieBuy do not have the option to include a cardholder name.
All gift cards are not created equal. Each merchant will have their own terms and associated costs. It's important to know the total cost of your gift card, and any restrictions or charges to the recipient, before you make your purchase.
Gift cards are normally not subject to a use tax at the time of purchase, since use tax will be paid when the card recipient uses the card. Also, service fees, shipping charges and initial load fees are not taxable. Handling fees are taxable only if listed separately at the time of purchase. Contact the supplier directly if you believe that they have incorrectly assessed a tax.
For gift cards purchased with a Procurement Card, a system-generated tax may be added for cards purchased from some out-of-state suppliers. The KFS Use Tax Accrual Correction Form should be processed to remove the tax.
Awards presented to an employee on a regular or routine basis must be reported as taxable income to the employee.
In general, gift cards for use in California do not expire; this rule generally applies to gift cards that are only redeemable at a specific store. Gift cards that are not specific to one store (such as a VISA or MasterCard) generally do not fall under the California regulations.
AggieBuy customers have the option to manually change the commodity code for a gift card purchase if necessary. The default code is GIFTCARD (Employee Gift), which is assigned to object code 8072 (Employee Non-Cash Awards).
The other gift card commodity code options are:
- GIFTCDNE (non-Employee Gift) assigned to object code 7710 (Non-Employee Non-Cash Award)
- GIFTCDPA (Research Participant) assigned to object code 7202 (Research Subject)
- Employee Non-Cash Awards (PPM 380-50)
- Gift Cards (PPM 350-23)
- Gifts Presented to Nonemployees (PPM 260-45)
Questions on the Gift Card program should be directed to Vartan Vartkessian, Card Program Administration Supervisor.