Prepaid Cards
Prepaid cards, regardless of value, are considered cash equivalents by the IRS and are subject to tax reporting. Departments purchasing and distributing prepaid cards must comply with IRS regulations and Rice University policies, including Policy 826: Gifts Made from University Funds.
When prepaid cards may be purchased
- Event prizes (e.g., door prizes, participation prizes, raffles)
- Tokens of gratitude/thank-yous for volunteering
- IRB-approved research study participants
- Students in need-based or emergency situations
- Meals for virtual events that would have included in-person dining
When prepaid cards cannot be purchased
- Gifts for milestone achievements (e.g., retirement, birthday, anniversary, graduation, birth of a child)
- Gifts for holidays
- Compensation for goods and/or services received
- For Rice employees (faculty, staff, graduate assistants/instructors of record, hourly student workers)
Available Card Types
| Vendor | Card Types | Additional Information |
|---|---|---|
| Amazon | Physical & e-gift cards | |
| Target | Physical & e-gift cards | |
| US Bank Visa | Physical gift cards | $1.50 fee/card; $25 minimum value |
| DoorDash | Physical & e-gift cards | 25 card minimum; $15-$500 denominations; $1,000 minimum order total |
Procedures by Category
Procedure for cards intended for gifts or prizes
If a single recipient is expected to receive $600 or more in payments from Rice in a calendar year, the recipient must first be registered as a supplier in iO for tax reporting purposes. Recipients receiving less than this amount in a calendar year do not need to be registered as a supplier.
Procedure for ordering cards:
- Submit the Prepaid Card Request Form along with a completed Prepaid Card Disbursement Log to the Bursar's Office through the Secure File Upload Folder.
- The Bursar's Office will initiate purchase and submit payment through a Purchase Requisition, which may require additional funding approval in iO.
- Once the purchase is completed, the gift cards will be disbursed by the Bursar's Office. In-person card disbursements will be arranged with the Prepaid Card Custodian.
Procedure for cards intended for IRB-Approved Survey Participants
Gift/prepaid cards intended as an incentive for Human Subjects may be purchased with a PCard. The purchase must follow Rice's PCard limit policy of being under $3,000. For requests exceeding this amount, please follow the procedures below to order cards through the Bursar's Office.
Procedure for ordering cards:
- Submit the Prepaid Card Request Form along with proof of IRB-Approval to the Bursar's Office through the Secure File Upload Folder.
- The Bursar's Office will initiate purchase and submit payment through a Purchase Requisition, which may require additional funding approval in iO.
- Once the purchase is completed, the electronic or physical cards will be delivered to the Prepaid Card Custodian for disbursement.
Procedure for cards intended for meals
For virtual events, that would have otherwise been held in person with food provided, prepaid cards limited to meal purchases may be used as a substitute.
Procedure for ordering cards:
- Submit the Prepaid Card Request Form along with a completed Business Meeting/Entertainment Expense Form to the Bursar's Office through the Secure File Upload Folder.
- The Bursar's Office will initiate purchase and submit payment through a Purchase Requisition, which may require additional funding approval in iO.
- Once the purchase is completed, the prepaid cards will be disbursed to the Prepaid Card Custodian for disbursement.
Please note that purchase turnaround time can take as long as two weeks, so please consider that when planning.
In the event of an audit, it is the responsibility of the department to maintain proof of disbursement for all cards. Records should be maintained in accordance with Rice University's record retention guidelines.