New Federal Regulation on Gift Cards
On March 31, 2012, the Financial Crimes Enforcement Network (aka FinCEN, a division of the US Treasury Department) began enforcing
new regulations that affect the sales of gift cards to end users. For purchases above $10,000 of gift cards by an individual in any
24 hour period, we are now required to collect, verify, and store additional information about the purchaser, at the time of sale.
That is why we require the family to place the order that puts them over the $10,000 threshold themselves.
We will not use the information collected from the family for any purpose other than to comply with the FinCEN rules. We will not
share the information with anyone other than federal law enforcement officials, if asked to do so, and as necessary to perform the
required verification. We have prepared two lists of FAQs below that we hope will answer any questions you might have about these
rules. If you still have questions after reading through them, please contact us by phone at 800-727-4715 and select option 3, or
you can email us at GLSCMail@glscrip.com. We’ll be happy to answer any questions you might have.
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Q. Does this mean I can’t order more than $10,000 for my organization in one day?
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A. No, the new regulations do not apply to sales to our non-profit organizations. As long as no single family is purchasing more than $10,000 worth of cards on your order, the changes will have no effect.
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Q. Do the changes affect gift cards obtained from a supplier other from Great Lakes Scrip Center?
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A. Yes, the new requirements apply to all gift card purchases by an individual from any source. Great Lakes Scrip Center will meet the requirements for you if you have set up the cards as local products on ShopWithScrip, and the family orders them online. If the family does not order through ShopWithScrip, and the supplier doesn’t complete the requirements for you, it is your responsibility to follow the FinCEN regulations for orders above the $10,000 threshold in one day.
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Q. Can I place a proxy order for a family that exceeds the limit and enter their information for them?
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A. If the sale is to a family for personal use the family must place the order themselves, and enter their own information.
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Q. How do I handle a large sale to a business or a purchase of cards for my organization that I normally enter as a proxy or SCRIPWARE order on ShopWithSCrip?
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A. Business to Business transactions are excluded from the FinCEN regulations. You have an option when entering a proxy or SCRIPWARE order to indicate that the sale is to a business for an order that will put the family account over $10,000 in a 24 hour period. When you check the box indicating it is a business to business transaction, you will be asked to provide your name, the name of the business the cards are going to, and the reason for the purchase. This will allow you to enter large proxy orders for gift cards being purchased by a business, and for cards being used by the organization for inventory or other purposes.
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Q. What if one of my members does not use ShopWithScrip, and purchases more than $10,000 in gift cards in a single day from my organization?
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A. We strongly encourage you to take advantage of our system so we can take the responsibility for meeting the FinCEN regulations. If you decide not to, the responsibility will be yours to follow all of the guidelines.
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Q. What is my organization responsible for if I elect to accept orders from one family totaling more than $10,000 in a single day that were not placed on ShopWithScrip?
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A. You have to develop and implement an Anti-Money Laundering policy. You have to gather, store and verify information about the purchaser. You have to monitor all sales activity for suspicious activity, and you have to report any suspicious activity to the FinCEN. There is a lot of information available to you on the internet if you search for “FinCEN Prepaid Access Final Rule”.
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Q. Do these changes affect the way I use my gift cards at the retailer or online?
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A. No, there are no new requirements when families are redeeming their gift cards.
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Q. Do the changes affect the rebates my organization earns from a purchase that exceed $10,000 in a single day?
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A. No, the family still pays the full face value of their order, and the organization will pay the net cost of the products when they place the order for the family as usual.
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Q. What is the purpose of these new rules?
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A. The Financial Crimes Enforcement Network has been monitoring large banking transactions for years to deter money laundering and other financial crimes. They have extended the requirements for retailer gift cards, since they believe they can be another avenue for criminals to launder money.
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Q. Does it matter what kinds of products the family is ordering, or how they pay for their order?
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A. The types of products and the payment method do not matter. The threshold is over $10,000 in a 24 hour period for any types of orders and any payment methods.
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Q. Is the $10,000 limit for one product or a total for all products on the order(s)?
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A. The threshold applies to the sum of the face value total of all orders placed within a 24 hour period, regardless of the product types.
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Q. What information is required from a family exceeding the $10,000 threshold?
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A. We will ask for their name, any aliases, date of birth, home address, phone number, driver’s license number, and the reason for their purchase. That is enough information to satisfy the FinCEN requirements.
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Q. What does GLSC do with the information the family enters?
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A. The information is stored securely on our network, as is all family and organization information. We will provide information to FinCEN as required and will use the information to verify the family’s identity. However, we will not share it with anyone else, as we have defined in our privacy policy.
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Q. What happens if GLSC can’t verify the information provided by the family?
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A. Our first step will be to contact the family and see if there is an error in the information, or if they have additional details that would assist us, so that we can verify it.
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Q. What happens if GLSC still isn’t able to verify the information the family entered after contacting them?
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A. If we aren’t able to complete the verification based on the all of the information provided by the family, it may be necessary to file a report with FinCEN. The organization would not be involved, since the sale is between GLSC and the family, and GLSC is responsible for meeting the FinCEN requirements.
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Q. Will the order be held up until the information is verified?
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A. No. Verification will take place at our next opportunity, and will not slow down the ordering and fulfillment process.
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Q. What if a family submits smaller orders on separate days to break up a large purchase, in order to avoid meeting the $10,000 threshold, and supplying the information?
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A. Breaking up transactions for the purpose of avoiding the reporting of information is considered "structuring" by FinCEN. That would be considered suspicious activity that if detected, might have to be reported.
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Q. What would be considered Suspicious Activity?
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A. While we cannot release the details of how orders are evaluated, please be assured that normal family purchases are not what the FinCEN requirements were intended to monitor.
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Q. What is my organization responsible for if I did not use ShopWithScrip to place my order that puts me over the $10,000 limit in a 24 hour period?
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A. The FinCEN regulations apply to any sale to an individual that exceeds the $10,000 limit in a 24 hour period. Placing your order on ShopWithScrip.com means that Great Lakes Scrip Center will meet all of the requirements of the FinCEN regulations for your organization. If you did not place the order through ShopWithScrip, your organization would be responsible for developing and implementing an Anti-Money Laundering policy. They would have to gather, store and verify information about the purchaser. They would have to monitor all sales activity for suspicious activity, and they would have to report any suspicious activity to the FinCEN. There is a lot of information available on the internet if you search for “FinCEN Prepaid Access Final Rule”.
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