The Postal Service™ has signed contracts with suppliers of gift certificates and gift checks to be used for recognition award items. Below is updated information for managers to use in implementing the program. Additional information can be found in the Employee and Labor Relations Manual (ELM) 470, Pay Administration Recognition and Awards; Management Instruction FM-640-2000-1, Employer Tax Reporting Responsibilities — Conference, Meeting, and Training Session Mementos or Gifts; and the Compensation website, http://blue.usps.gov/hrisp/comp/paysalary/awardsandrecognition.htm.
There are two approved vendors that managers are authorized to use for purchasing gift certificate awards equaling $25 or more in value: 1) GiftCertificates.com; and 2) IncentOne. (As of November 29, 2008, Rymax and Global Sports Access will no longer be part of the authorized gift certificate vendor program.) Gift certificates are considered off-catalog eBuy purchases. This means that you must obtain purchase approval through eBuy, but purchase gift certificates through the vendors’ dedicated Postal Service websites (listed below) using a VISA SmartPay credit card for payment. You can find the vendors’ addresses, contract numbers, and other information on their websites. $10,000 is generally the purchasing competition threshold. Because these approved vendors have contracts with the Postal Service, the $10,000 limit on purchases does not apply, and you are not required to send requisitions to Supply Management for orders exceeding this amount. The only limit on purchases is the limit on your VISA SmartPay Card.
Gift certificates purchased from the authorized vendors are generally limited to denominations of $25, $50, $100, and $250. However, certificates of different denominations may be purchased with the agreement of the vendor. In addition, managers may purchase gift certificates valued at less than $25 from other sources, adhering to all Postal Service and local purchasing rules and regulations.
GiftCertificates.com
http://www.giftcertificates.com/usps
The SuperCertificate reward offers gift cards to national and local merchants, including the most popular stores, theaters, and restaurants. Employees can choose gift cards from hundreds of local, national, and online merchants.
IncentOne (800giftcertificates.com)
www.800giftcertificate.com/usps
IncentOne offers a 5 percent face-value discount on the Gift Certificate Award. It provides access to over 400 retailer gift cards and thousands of electronic, entertainment, dining, and merchandise reward options.
The Internal Revenue Service (IRS) requires that all gift certificate awards, regardless of their value, be reported as income. The Postal Service eAwards application is the only authorized method for this reporting. Report gift certificate awards in eAwards under the appropriate award type, depending on the employee category and reason for the award. (Note: Not all employees are eligible to receive gift certificate awards, so verify a recipient’s eligibility prior to presenting the award. The eAwards application will not accept reporting for employees ineligible to receive an award.)
For accounting purposes, gift certificate awards should be reported in the same pay period they are issued, but must be reported in the same calendar year they are issued for proper income reporting for tax purposes. The eAwards system normally stops accepting new award entries for fiscal year-end processing in late September, and for calendar year-end processing in late December. Awards not approved by the approver designated in eAwards before these cut-off dates are held for processing in either the next fiscal year or calendar year. The fiscal year cut-off date is announced in the annual Postal Bulletin article regarding fiscal year-end activity. The calendar year cut-off will be posted on the eAwards message board.
For career employees, the payroll system automatically calculates and pays tax assistance on gift certificate award amounts that equal or exceed $50. The additional tax liability is charged to the finance number indicated in eAwards at the time of award submission and approval. Normal payroll deductions will be withheld from the paycheck relevant to the pay period the award is entered in eAwards for gift certificate awards valued at less than $50 presented to career employees. Tax assistance is not provided for noncareer employees who receive gift certificate awards.
These instructions apply to all gift card purchases. Additional processes and controls, set by the officer of an organization, may also apply.
The Postal Service has entered into an exclusive contract with American Express for the purchase of Gift Cheques to be used as cash equivalent awards for employee recognition. American Express is the only authorized source of cash equivalent awards. No gift checks, debit cards, or other cash equivalent awards may be purchased from any other vendor. American Express Gift Cheques can be purchased only through eBuy; they may not be purchased directly from the American Express website or any other source.
American Express Gift Cheques are available only in $100 denominations. You can issue American Express Gift Cheques purchased under this contract only as cash equivalent recognition awards; you cannot use them for any other purpose.
The IRS requires that all cash equivalent awards, regardless of their value, be reported as income. The Postal Service eAwards application is the only authorized method for reporting this income. Report cash equivalent awards in eAwards under the appropriate award type, depending on the employee category and reason for the award. (Note: Not all employees are eligible to receive cash equivalent awards, so verify a recipient’s eligibility prior to presenting the award. The eAwards application will not accept reporting for employees ineligible to receive an award.)
Cash equivalent awards should be reported in the same pay period they are issued for accounting purposes, but must be reported in the same calendar year as issuance for proper reporting for tax purposes. The eAwards system normally stops accepting new award entries for fiscal year-end processing in late September, and calendar year-end processing in late December. Awards not approved by the approver designated in eAwards before these cut-off dates are held for processing in either the next fiscal or calendar year. The payroll system automatically calculates and pays tax assistance on cash equivalent awards. The additional tax liability is charged to the finance number indicated in eAwards at the time of award submission and approval.
These instructions apply to all cash equivalent purchases. Additional processes and controls, set by the officer of an organization, may also apply.
Noncash tangible merchandise items may be used for recognition awards. These items include apparel, tickets for a specific sporting or entertainment event, plaques, electronic devices, and other personal property.
You can procure noncash tangible merchandise items locally in accordance with established Postal Service and local purchasing rules and regulations.
Noncash tangible merchandise items are considered income by the IRS. If the value of merchandise items presented for recognition is equal to or exceeds $50, report the award in eAwards under the appropriate award type depending on the reason for the award and the employee category. Personalizing a merchandise item, such as apparel or a plaque, does not exclude it from IRS reporting requirements, personalized items must be reported in eAwards if the value meets or exceeds the $50 threshold. (Note: Not all employees are eligible to receive noncash tangible merchandise items as awards, so verify a recipient’s eligibility prior to presenting the award. The eAwards application will not accept reporting for employees ineligible to receive an award.)
Specific Postal Service rules and IRS regulations exist for awards and gifts presented at on- and offsite meetings, training sessions, conferences, etc. See Management Instruction FM 640-2000-1, Employer Tax Reporting Responsibilities — Conference, Meeting, and Training Session Mementos or Gifts, for more information regarding gifts given to Postal Service employees by the Postal Service, and also by outside sources in this context.
— Compensation,
Human Resources, 11-20-08
