This page provides a high-level purchasing overview for gift cards. Always consult policy before making this kind of purchase.
- Appropriate Gift Card Purchases
- Acceptable Purchasing Methods
- Gift Cards and Use/Sales Tax
- Expiration Dates and Card Fees
- 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.
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 unallowable uses of gift cards:
- Taxable awards (e.g., length of service or retirement awards in excess of $400.00)
- 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.
The preferred method of purchasing gift cards is in AggieBuy, using the National Gift Card Corp (NGC) 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. Whenever possible, it's recommended that you purchase multiple gift cards at one time to minimize shipping costs.
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 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.
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. 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.
- 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.