Guidelines regarding gratuities from University suppliers (gifts, entertainment, discount offers, etc.)

It is state law. Don't accept or solicit gratuities from University vendors! Gratuities are defined as gifts, entertainment opportunities, meals, discounts (and the like), from University suppliers. 

It sounds simple, but following this directive can be difficult at times, particularly during the holiday season.

Gratuity FAQ's, click on the question to jump to the answer below:

1.  GIFTS OF NEGLIGIBLE VALUE :

Is it OK that a sales rep gave me a plastic ballpoint logo pen?

2.  VALUABLE GIFTS: Is it OK to accept a valuable gift?

What constitutes a “valuable” gift?

3.  USING THE GIFTS AS AWARDS:

What if I plan to use the gift(s) for employee awards?

4.  MEALS & ENTERTAINMENT:Should I let a sales rep pay for my lunch, or take me out to an entertainment event?

5.  TRAVEL EXPENSES:

Is it OK for a vendor to pay for my airline tickets, hotel, or conference registration for an event or seminar?

What if I am to be a trainer or presenter, and the supplier offers to pay all my expenses in return?

6.  DISCOUNTS TO UNIVERSITY EMPLOYEES:

Is it OK to take a discount being offered, to OU employees, on my personal purchase?

7.  WHEN A GRATUITY IS OFFERED:

What do I do if a gratuity is offered?

8.  GIFTS THAT ARE SENT IN THE MAIL:

What do I do with a gift of value that is mailed to me – for example, a Christmas gift, from a supplier?

9.  GIFTS OF CLOTHING:

What about gifts of clothing, like a ball-cap, a t-shirt, etc?

10.  FREE GIFT WITH YOUR ORDER:

Sometimes, a University supplier sends a free gift with the shipment of the order - for example, with every order over $500. Is it OK to accept that kind of gift?

11.  WINNING A CONTEST:

I entered a contest and won a prize from a University supplier. Is this OK?

12.  FREE SAMPLES FROM A SUPPLIER: What about accepting free samples from a supplier?

13.  VENDOR SPONSORED EVENTS AT CONFERENCES: Sometimes, at professional conferences, University suppliers will sponsor events such as meals, receptions, or open houses where food and beverages are served. Can I attend such events?

14.  OHIO REVISED CODE:

Where can I see the details about the State of Ohio laws involved?

1.  IS IT OK THAT A SALES REP GAVE ME A PLASTIC BALLPOINT LOGO PEN?

Yes. A good practice for dealing with gifts of minimal value, that are given infrequently, is to put the pen or calendar (e.g.) to business use, rather than use it personally. Gifts of any significant value should not be accepted, nor should a pattern of gift-giving develop.

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2.  IS IT OK TO ACCEPT A VALUABLE GIFT?

No. The bottom line: Don't accept gifts of value that can substantially or improperly influence your business decision – or might appear to have done so.

WHAT CONSTITUTES A VALUABLE GIFT?

The law does not provide a dollar amount for such “gifts of value” but here are some recent examples:

•  A state employee was successfully prosecuted for accepting two hams (total value = $45) from a vendor with whom he did state business. He lost his job, paid a hefty fine, and did community service.

•  Another state employee, who awarded approximately $30 million worth of business to various vendors over the course of a year, was successfully prosecuted for accepting less than $1000 worth of gifts from vendors, over the course of that year (in the form of gifts and entertainment outings).

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3.  WHAT IF I PLAN TO USE THE GIFT(S) FOR EMPLOYEE AWARDS?

Though he used them as door prizes at an annual employee luncheon, a state employee was prosecuted for committing wrongful acts by accepting items such as:

•  $25 restaurant gift certificates

•  Tins of cookies

•  Holiday gift baskets

Do not use vendor gifts to provide personal gifts to University employees. If you want to provide an employee award, buy it outright, per the guidelines provided in the Gift-buying Guidelines: http://www.finance.ohiou.edu/pcard/giftbuyguide.htm and the University's employee recognition policy # 40.011

(http://www.cats.ohiou.edu/policy/40-011.html).

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4.  SHOULD I LET A SALES REP PAY FOR MY LUNCH OR TAKE ME OUT TO AN ENTERTAINMENT EVENT?

No. Do not accept personal invitations. Pay your own way on business lunches and the like.

5.  IS IT OK FOR A VENDOR TO PAY FOR MY AIRLINE TICKETS, HOTEL, OR CONFERENCE REGISTRATION FOR AN EVENT OR SEMINAR?

That depends.  All the following must be true, for it to be OK:

 •  All events being paid for are directly work-related.  If you are interested in attending any extraneous entertainment events that are being offered at the conference, you should pay for those personally.

•  The vendor’s offer could not be interpreted, by any reasonable person reviewing the event, as an attempt to influence your business decisions.  Ask yourself:  Am I in a position to influence a decision to buy from this supplier? Be aware that if the vendor has already won a competitive bid award from the University, and the opportunity being offered was part of the vendor’s offer, then you are in the clear to accept the offer.  In that case, the vendor is not an attempting to influence award of business, but rather is following-through on an already-made award (i.e., an already-signed Contract or Purchase Order).

IN SHORT:  Avoid accepting offers from vendors when the offer might be interpreted as the vendor trying to influence your business decision.  Also avoid accepting anything that provides personal benefit.

WHAT IF I AM TO BE A TRAINER OR PRESENTER, AND THE SUPPLIER OFFERS TO PAY ALL MY EXPENSES IN RETURN?

Again – that depends.

•  If the vendor is following through on a contractual agreement, then you may accept the offer (see the second bullet point in the question directly above this one).

•  If the conference registration fees, travel, meals, lodging, or related expenses being offered ARE NOT of such a character as to manifest (or appear to manifest) a substantial or improper influence upon you with respect to the performance of your job duties:  You may accept the offer.   To determine this, CONSIDER THE SOURCE:  Is the party making the offer doing, or seeking to do business with, the University?  If the answer is NO, then you may accept the offer.

•  If the conference registration fees, travel, meals, lodging, or related expenses being offered ARE of such a character as to manifest (or appear to manifest) a substantial or improper influence upon you with respect to the performance of your job duties:  ONLY the conference registration fee waiver may be accepted, and then ONLY IF the vendor is waiving such fees for all presenters, and the request for the presentation is a valid request, and not a subterfuge for providing registration fees for University employees.

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6.  IS IT OK TO TAKE A DISCOUNT BEING OFFERED, TO OU EMPLOYEES, ON MY PERSONAL PURCHASE?

If the discount is being offered to all OU employees, it can be accepted. NEVER accept a discount or gift being offered to you, particularly and personally, by a vendor hoping to influence your job-related decisions. NEVER accept, expect, or solicit special treatment or gifts from vendors because you are in a position to help direct University business their way.

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7.  WHAT DO I DO IF A GRATUITY IS OFFERED?

Here are some guidelines to use during the holiday season, and throughout the year:

•  Do not accept gifts of value if they are sent to you. Return gifts that are left for you or sent to you. Let the vendor know that University employees cannot accept such gifts from University vendors.

•  When in doubt, always say no. Feel free to call Ralph Six 3-1970, (or email him) if you are uncertain how to proceed.

•  Report a vendor who makes you uncomfortable by offering extravagant gifts, or by continuing to offer gratuities despite your requests to the contrary. Call Procurement Services (Ralph, above) or the Internal Audit Office (info below). A supplier who engages such practices can be reported to the Ohio Ethics Commission, and may be subject to cancellation of their Purchase Orders and contracts with the University.

•  Another resource for answers regarding gratuities is the University's Internal Audit Office: http://www.ohio.edu/audit/internal.cfm , 740-593-1865.

•  You may want to visit the Ohio Ethics Commission website: http://ethics.ohio.gov/ethicshome.html . You can search for specific information about your circumstances, or call the Ethics Commission for guidance. Phone: (614) 466-7090, Fax: (614) 466-8368.

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8.  WHAT DO I DO WITH A GIFT THAT IS MAILED TO ME BY A UNIVERSITY SUPPLIER – FOR EXAMPLE, A CHRISTMAS GIFT?

Keep all packaging materials, and use them to mail the gift back. Enclose a simple, polite note, explaining that as a University employee, you cannot accept gifts from University suppliers. Ask them not to send any more gifts. Some possible wording:

Dear XXXXX: I am returning your gift because the University is a state agency, and state of Ohio laws preclude acceptance of gifts of value from University suppliers. The thought is appreciated, but I must ask you not to send gifts of this nature to me in the future. Sincerely – XXXX.

Keep a record of your actions. Postage or shipping charges for the return should be charged to the appropriate departmental account. The department should make every effort to return the gift. However, if the gift is excessively large, heavy, or if it is perishable, and you have concerns about high shipping costs or decay, you may contact the Purchasing & Contracting Office at 593-1960 to make arrangements to deliver the item to Purchasing. Purchasing will need the packaging materials, and if it is not provided on the packaging, the identity and address of the sender.

For your own records and protection, you should also attach a memo to the package, explaining what the item is and why you have delivered it to the Purchasing Office. Keep a copy of your memo. The Purchasing Office will also keep record of the delivery.

The Purchasing Office will send a note to the supplier explaining that such gifts cannot be accepted, and that further gifts should not be sent. Depending on the circumstances – the nature and value of the item, the likely shipping charges for return, etc - the gift will be sent back, or placed in a public area for consumption, or delivered to a local charity.

Under no circumstances should a University employee accept and use such items personally, or give them to others as personal gifts.

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9.  WHAT ABOUT GIFTS OF CLOTHING, LIKE A BALL-CAP, A T-SHIRT, ETC.?

The questions are the same :

1) Is it a gift of value? (See above What constitutes a “valuable gift?”)

2) Might it (or might it appear to) influence your business decisions? A one-time gift of a simple cloth ball-cap may not be questioned, but a pricey leather jacket is definitely questionable. There are many possibilities in between these two extremes. Do not let a pattern of gift-giving develop, even with lower-value items. Again: When in doubt, say no. (See above: What do I do if an offer is made ? )

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10.  SOMETIMES, A UNIVERSITY SUPPLIER SENDS A FREE GIFT WITH THE SHIPMENT OF AN ORDER – FOR EXAMPLE, WITH EVERY ORDER OVER $500. IS IT OK TO ACCEPT THAT KIND OF GIFT?

The simplest thing to do, if you have the option, is to opt out of the gift giveaway, at the time you place the order.

If a free item does come with your order, this item is associated with a University order and it is University property. It should be used for business purposes only – it should never be given to University employees for personal use.

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11.  I ENTERED A CONTEST AND WON A PRIZE FROM A UNIVERSITY SUPPLIER. IS THIS OK?

Contest prizes are almost always gifts of value. But the question remains: Might the prize influence (or appear to influence) business decisions?

If you are someone who is involved in making, or might be involved in making, decisions to make University purchases from the supplier involved, do not enter the contest. If you have entered such a contest and do win the prize, do not accept the prize.

EXAMPLE: A University employee whose job duties never include involvement in the purchase of a University automobile, can accept the prize of a free automobile from the Ford Motor Company, should he or she enter and happen to win a contest for a new car from Ford. A University Purchasing Agent, or anyone else who may assist in the selection of a vehicle for University purchase, should not do so.

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12.  WHAT ABOUT ACCEPTING FREE SAMPLES FROM A SUPPLIER?

Free product samples can be accepted, if there is a legitimate business use for the sample, or a business purpose for evaluating the product.

Do not take the items home or put them to personal use.

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13.  SOMETIMES, AT PROFESSIONAL CONFERENCES, UNIVERSITY SUPPLIERS WILL SPONSOR EVENTS SUCH AS MEALS, RECEPTIONS, OR OPEN HOUSES WHERE FOOD, BEVERAGE OR ENTERTAINMENT IS PROVIDED. CAN I ATTEND SUCH EVENTS?

Yes. Paraphrasing Ohio Ethics Commission Opinion No. 2002-02, you are not prohibited from attending a meal, reception, or open house, at an educational or informational conference, if the meal, reception, or open house is of an ordinary, routine character, and all conference attendees are invited.

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14.  WHERE CAN I SEE THE DETAILS ABOUT THE STATE OF OHIO LAWS INVOLVED?

Anyone who is in a position that requires them to select vendors – be it for everyday buying with their p-card, or for high dollar vendor awards as members of a selection committee – should read all the details, at the following Ohio Ethics Commission websites:

Ohio Ethics Law:

http://ethics.ohio.gov/ethicslawrevisedcode.html

Ohio Ethics Commission Guidelines: “Ethics is Everybody's Business”

http://ethics.ohio.gov/publicinfoeieb.pdf

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