This page provides a high-level purchasing overview for gift cards. Always consult policy before making this kind of purchase.
Gift cards can be presented on behalf of the university to its employees for work-related awards:
- Employee recognition ($75 or less per award)
- Length of service ($400 or less per award)
- Retirement ($400 or less per award)
Gift cards presented to employees as recognition awards must be given infrequently.
Non-cash awards exceeding the amounts above require a written exception approved by the Associate Vice Chancellor–Finance. There may be income tax implications when the value exceeds those amounts.
The following are among unallowable uses of gift cards:
- Taxable awards (e.g., length of service or retirement awards in excess of $400)
- Gift cards used as honoraria payments
- To be used by the department an "alternative" purchasing method that bypasses policy
Departments that recognize possible problems 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.
Acceptable Purchasing Methods
The preferred method of purchasing gift cards is in AggieBuy, using the National Gift Card Corp (NGC) catalog. This is a punch-out catalog available from the punch-out suppliers section of the AggieBuy home page.
The following fees are added by NGC to gift card purchases:
- Retail cards: no fee
- Visa Reward 12 month: $2.95
- American Express Reward 12 month: $2.50
- American Express Gift Card: $3.50
In addition, each order through NGC in AggieBuy will add a flat $7.65 Shipping charge. This will be reflected in your order on the NGC punch-out site, but you will not see it once you check out in AggieBuy. The shipping charge will be reflected on the invoice paid to NGC and on your FIS Decision Support (DS) reports. Note: At this time, the gift cards purchased through AggieBuy do not have the option to include a cardholder name.
If you have gift card needs that are not met through AggieBuy, you may still purchase them via a KFS Disbursement Voucher or on the Procurement Card.
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 and Sales/Use Tax
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 vendor 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 vendors. 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.
Questions on the Gift Card program should be directed to Vartan Vartkessian, Card Program Administration Supervisor.