To qualify as a non-cash award, gift cards and certificates must be non-negotiable and redeemable as tangible personal property.

A gift card or certificate is considered tangible if it is:

• Inscribed with the recipient's name
• Not transferable
• Not redeemable for cash
• Not redeemable for payment on the balance of the recipient's account with the merchant
• Not redeemable for services, such as a facial, spa treatment, golf lessons, etc.
• Not purchased for less than $10 (Under California law, cards with a value less than $10 are redeemable for cash)
  • Note: If a gift card cannot be inscribed with the recipient's name, the department should inform the employee that the card is non-transferable. Having the name inscribed on the card is preferred as this provides the optimum documentation for meeting IRS guidelines.

Quantity purchases of on-the-spot recognition awards: Non-cash employee recognition awards (usually gift cards) given throughout the year to recognize an individual or team effort are oftentimes referred to as "on-the-spot" awards. A department might award an employee with a single recognition award not to exceed $75 in a calendar year, or can award an employee up to 3 awards per year (not to exceed $75). These on-the-spot awards can be purchased in advance quantities if the following rules are followed:

• Gift cards and certificates are kept in a secure place
• Proper documentation of gift card and certificate use is maintained
• Gift cards and certificates aren't purchased in quantities greater than what is to be awarded in a fiscal year
• The value of the gift card or certificate does not exceed $75

When purchasing gift cards and certificates using Payment Authorization, see how to pay for:

• Length of service award
• Prizes and other gifts
• Recognition award
• Retirement gift

When vendor requests payment using wire transfer, see how to request a wire in:

• U.S. dollars
• Foreign currency

Questions? Contact Robin Posner.