Gift Card & Prize Purchases using PCard

Gift Card/Prize Guidelines and Process when PCard is Utilized

Gift Cards 

The State of Arkansas has granted the University of Arkansas an exemption that allows the PCard to be utilized to purchase Gift Cards and Prizes, if approved by the eProcurement Office.   Failure to comply with any of the steps and guidelines outlined will result in immediate suspension of the card holder's PCard.

Currently the following types of gift cards are allowable when the PCard has been PRE-APPROVED for use:

  • Walmart
  • Sam's Club
  • Amazon

You are not allowed to purchase another merchant's gift card while purchasing from one of these locations, nor are you allowed to purchase gift cards to these merchants from other locations (E.g., A Starbucks gift card cannot be purchased at a Walmart.  An Amazon gift card cannot be purchased at a Walgreens. etc.).  Gift cards must be purchased AT these merchants, FOR these merchants.  Our exemption to allow the use of the PCard, is only for gift cards branded by one of these merchants.

Gift Cards are considered cash equivalents, and therefore it is important that organizational units handle and account for these cards appropriately.   The purpose of these guidelines is to set forth the requirements for use, approval, purchase, accounting, tax reporting, and safeguarding of gift cards.

The main use for the disbursement of gift cards fall under one of the categories below:

  • Research Incentive
  • Student award (example:  placed 1st, 2nd, 3rd, in Poetry contest)
  • Drawing at an Athletic Event (Example:  drawing of a seat number)

A gift card purchased for use as a 'gift' is NOT ALLOWABLE.  In most instances employees will not qualify for a gift card, unless the employee has been picked as part of a research incentive or random drawing event such as an Athletic event.  If that is the case, the employee will be taxed on the gift card value through Payroll.

Employees who qualify for a gift card will be taxed through Payroll regardless of the dollar amount, other recipients will receive a 1099-MISC form IF the total amount of payments for the individual reach a dollar amount of $600.  If the total dollar amount a non-employee receives is less than $600, it is the responsibility of the individual to report these earnings.

Please note:  If the winner of an award or prize is not a U.S. Citizen or Permanent Resident, the appropriate amount of federal taxes must be withheld and reported on a 1042-S.  Because of federal tax withholding requirements, gift cards may not be issued.  If a gift card is awarded to someone that is not a U.S. Citizen or Permanent Resident, the department will be billed 30% of the value of the gift card through an Internal Service Delivery (IDS) through Workday.  Payments to employees may be processed through Payroll Services.  Payments to non-employees may be processed through Business Services.  Please work with Payroll when processing payments to foreign nationals. 

Contact Information:

Amanda Sanders: ajs030@uark.edu 

Be aware that you cannot always use an international student or scholar as a research subject.  This needs to be approved BEFORE you allow a foreign national to participate as a research subject.  Again, you need to check with Amanda Sanders.  There could be severe consequences if you use a foreign national as a research subject that should not have been used.

For students who qualify for a gift card, if the amount of the gift card is $200 or greater, this amount will  be provided to Financial Aid and will be entered as part of the student's scholarship package.

Gift cards, once purchased, must be kept in a secure campus location (example: locked drawer or safe) until distributed. 

Steps for Pre-Approval and Purchase

  1. A Gift Card Request Form  must be completely filled out, signed, and emailed to the eProcurement office at pcard@uark.edu. (exception is Food Science Testing Lab, where a process is already in place due to the extensive number of gift card incentives purchased).
  2. If request is approved, the Gift Card Request Form will be emailed back to the requester with an approved signature from the eProcurement Office. 
  3. Gift Cards are then purchased making every effort to ONLY purchase the quantity of cards that you know will be distributed for the specific event.  In other words, do not guess at how many cards are needed.  In most instances, you should know exactly the number of cards that will be distributed as defined on the Gift Card Request Form.
  4. When gift cards are distributed,  each recipient is to sign the Gift Card Disbursement Log.   All information must be filled out on this form including: last 4 digits of card number,  dollar value of card, Employee or Student ID (if applicable), US Citizen status, printed name, and signature of recipient. NOTE:  If multiple purchases are made, a separate disbursement log should be provided for each individual purchase.  The information on the top portion of the disbursement log should match the charge (date of purchase, dollar amount, number of cards purchased, etc.).  For example, if there was a purchase of five $150 gift cards today ($750), and then eight more next week ($1200), we will need a separate disbursement log for each purchase.  Also, ONLY the names of the recipients associated with an individual purchase should be provided on the disbursement log.  Please do not include recipient names that are not associated with the purchase.
  5. All documentation MUST be sent to pcard@uark.edu with the PC# and attached to the transaction verification in Workday.  The following documentation must be included:
    • Signed Gift Card Request Form
    • Signed Gift Card Disbursement Log (may be attached after the verification is complete)
    • Receipts from vendor where Gift Cards were purchased
    • If your study will be anonymous for IRB purposes a letter from the PI will be required stating such. The number of cards and dollar amounts of all cards given out will still be required by the eProcurement Office.
  6. All documentation will be forwarded to the Tax Compliance Office for review and submission to Payroll, or W9 reporting, if applicable.

In the rare event that all cards purchased were not able to be disbursed, the number of cards, last four digits of card numbers, and an explanation of where the cards are being stored must be provided with your documentation.  

Failure to comply with any of these steps will result in immediate suspension of the card holder's PCard. 

Please Note:  If it is found that gift cards were purchased, without prior approval from the eProcurement Office, the cardholder's PCard will be suspended immediately and further use of the PCard by the cardholder will not be allowed until the eProcurement Office deems appropriate.

Prizes

Prizes are treated similarly to gift cards, in that they must be pre-approved for purchase and you must keep records of recipients. However, there are a lot of gray areas where it's unclear whether an item is a prize, a gift, or something else. Here are some guidelines on classifying purchases of items to be given away:

 

Are you purchasing something for a recipient who has already been determined?

If so, this is a GIFT. Gifts are allowable in the following cases:

  • Items given to a speaker at an event in lieu of speaking fees
  • Plaques given to students in commemoration of their achievements
  • Plaques given to board or committee members upon termination of service on a board or committee

If you believe you have an allowable reason for purchasing a gift that is not listed above, please contact pcard@uark.edu before you make the purchase.

Will the item you are purchasing be given out at an event indiscriminately, to anyone who wants it?

If so, this is 'SWAG'. Pre-approval is not necessary for purchases of 'swag', although if you are purchasing 'swag' for an event that you're hosting then the cost of the items should be included on the Official Function Form.

Will the item you're purchasing be given out to individuals randomly chosen at an Official Function?

If so, this is a PRIZE. Prizes may be raffled out to attendees of an event, or distributed to participants in a study or similar project. Prizes must be pre-approved with a Prize Pre-Approval Form, and you must record the recipients and submit that information on the Prize Disbursement List form.

Steps for Pre-Approval and Purchase

  1. A Prize Request Form must be completely filled out, signed, and emailed to the eProcurement office at pcard@uark.edu.
  2. If request is approved, the Prize Request Form will be emailed back to the requester with an approved signature from the eProcurement Office. 
  3. Prizes are then purchased making every effort to ONLY purchase the quantity of prizes that you know will be distributed for the specific event.  In other words, do not guess at how many prizes are needed.  In most instances, you should know exactly the number of prizes that will be distributed as defined on the Prize Request Form.
  4. When prizes are distributed,  each recipient is to sign the Prize Disbursement Form.   All information must be filled out on this form including: last 4 digits of card number,  dollar value of prize, Employee or Student ID (if applicable), US Citizen status, printed name, and signature of recipient.   NOTE:  If multiple purchases are made, a separate disbursement log should be provided for each individual purchase.  The information on the top portion of the disbursement log should match the charge (date of purchase, dollar amount, etc.).  For example, if there was a purchase of five prizes today, and then eight more next week, we will need a separate disbursement log for each purchase.   Also, ONLY the names of the recipients associated with an individual purchase should be provided on the disbursement log.  Please do not include recipient names that are not associated with the purchase.
  5. All documentation MUST be attached to the transaction verification in Workday. The following documentation must be included:
  • Signed Prize Request Form
  • Signed Prize Disbursement Log(may be attached after the transaction is verified)
  • Receipts from vendor where Prizes were purchased
  • If your study will be anonymous for IRB purposes a letter from the PI will be required stating such. The number of prizes and dollar amounts of all prizes given out will still be required by the eProcurement Office. 
  • All documentation will be forwarded to the Tax Compliance Office for review and submission to Payroll, or W9 reporting, if applicable.

In the rare event that all prizes purchased were not able to be disbursed, the value and number of prizes and an explanation of where they are being stored must be provided with your documentation.  

Failure to comply with any of these steps will result in immediate suspension of the card holder's PCard.