Does your company use Gift Cards? Beware!

During a recent HR function audit, I discovered that a company purchases store gift cards for ad-hoc awards and employee recognition.  The problem however was that the process was totally uncontrolled.

The department didn’t retain a purchase receipt indicating the number and value of the cards, there was no documentation indicating who authorized any card issuance, no log tracking how many were in their custody, serial numbers, who and when they were issued to, and the remaining card totals and values.

Since these assets are liquid as cash, they are ripe for fraud or misuse, it’s important to treat them with the same level of control and custody.   This includes developing and documenting a policy for their acquisition,  SOD, use, and care within the organization.   There also may be Payroll tax withholding and reporting issues to address.   Planning to effectively manage the use of these instruments just makes prudent internal control practice.

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