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Business and Financial Policies and Procedures

21.3.1 Sell Gift Cards

Policy Statement

All merchant units are subject to and must comply with Section 401 of the Federal Credit Card Accountability Responsibility and Disclosure Act of 2009 and the Illinois State Consumer Fraud and Deceptive Business Practices Act as amended in 2008.

The requirements in the steps below do not apply to gift cards/certificates when they are:

  • Issued for prepared and unprepared food.
  • Given as a gift from the unit's inventory directly to an individual as part of an award, loyalty, or promotional effort.
  • Sold below face value at a volume discount to nonprofit and charitable organizations for fundraising purposes or to employers to give as a gift, as long as the expiration date is not more than 30 days after the date of sale.

The value of gift cards and certificates cannot be reduced over time by charges for non-use or untimely redemption. Do not accept P-Cards as payment when selling gift cards or certificates.

Procedure

To sell gift cards:

  1. Plan ahead. Consult with Merchant Card Services at merchantcardhelp@uillinois.edu or 217-244-9384. They will help you comply with federal and state laws and University procedures.
Consider offering only bank-issued gift cards which are not subject to the state law.
Using bank cards can have the following benefits:
  • No expiration date.
  • You do not have to establish toll-free numbers because the bank has already done this.
  • You do not need to meet the state unclaimed property reporting regulations.
Email Merchant Card Services for a list of banks that issue gift cards.
  1. If you decide to issue your own gift cards or certificates:
  • You must provide a toll-free phone number that card/certificate holders can call for balance inquiries. Print that number on the front or back of the gift card/certificate, and display it at your location (point-of-sale). For information on obtaining a toll-free number, contact:
         Urbana - Technology Services, Long Distance Telephone Services
         Chicago - ACCC Telecommunications Services
         Springfield - Information Technology Services
  • Do not charge a post-purchase fee or any other fee.
  • Do not charge sales tax when the cards/certificates are sold. Apply the sales tax when the gift card/certificate is used to make a purchase.
  1. Determine whether the gift cards or certificates will have an expiration date.
Cards with no expiration date remain valid until presented for a purchase or service. These cards are not subject to the unclaimed property reporting laws.
Cards with an expiration date must be valid for at least 5 years from the date they are issued or until presented for a purchase or service. These cards are subject to the unclaimed property reporting laws.
  1. When you sell the gift cards/certificates account for them as "deferred revenue" rather than "revenue" in the Banner General Ledger. When the gift cards/certificates are redeemed for goods or services, process a Banner journal voucher to reduce (debit) the deferred revenue using account code 61716 - Deferred Rev-Unredeemed Gift Cards, and increase (credit) revenue.

Related Policies and Procedures

7.6 The University P-Card
21.3.2 Report Expired and Unredeemed Gift Cards/Certificates
8 Payments and Reimbursements

Additional Resources

Federal Credit Card Accountability Responsibility and Disclosure Act of 2009
Illinois State Consumer Fraud and Deceptive Business Practices Act - 2008 Amendment

Last Updated: May 26, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2008

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