Your guide to corporate gift-giving laws

By Nancy A. Shenker

KEY POINTS

• What are corporate gift policies and why were they created?
• Company gift policy examples for certain industries, and general gifting guidance.
• Discover 4 gift ideas that may be, per general gifting guidance, “safe” to give.

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This article on gift-giving laws and policies is brought to you by Nancy A. Shenker, CEO of theONswitch marketing.

“I can’t accept that.”

Those can be painful words when trying to express gratitude by sending a gift to a client or prospect.

While ethics and transparency have always been critically important in the business world, industries have begun to get more stringent about their gift policies around giving and receiving business gifts. This includes, but is not limited to:

• Pharmaceuticals
• Media
• Financial services
• Government
• Technology
• Nonprofits

Within the past few decades, because the business world has become more concerned with ethics, they have introduced more policies around giving gifts: corporate gift giving policies. It is also known as gifts and entertainment policies.

Why are there gift giving policies?

Quite simply, corporate gift giving policies are designed to ensure an organization remains compliant with anti-bribery laws. It ensures they avoid fines, don’t lose business opportunities, and prevents jail time for those involved.

A little gift policy history

Giving a gift from one person to another should be something simple, seen as an act of appreciation and kindness, right? But back In the heyday of financial services and medical marketing, sales representatives and vendors would take their clients (decision-makers for major purchases) to expensive events and buy them luxury items.

Even the media industry (where advertising professionals can influence millions in spending) was also the subject of scrutiny around gifting. A recent article in Digiday declared, “Not a lot of mani-pedis these days,” citing a study by the Association of National Advertisers (ANA), which surfaced the issue of transparency.

Gift policies today

Today in certain industries, there are strict guidelines that determine who can give gifts, who can accept them, the value of those gifts, and other aspects of gift giving.

Yes gift policies are in place to prevent bribery, but they also prevent favoritism, and conflicts of interest (or the appearance of such.)

If your organization incorporates gift giving in its sales and marketing strategy, it’s a good idea to be familiar with these laws so that you can ensure you don’t accidentally cause any legal incidents.

What exactly is a bribe?

In the U.S., the General Federal Bribery Statute (18 USCS prec § 201(b)) defines a bribe as directly or indirectly corruptly giving, offering, or promising anything of value to any public official or person who has been selected to be a public official with intent to influence any official act, or to influence the recipient to commit or help commit fraud or otherwise act unlawfully.

It’s important to note that the same law not only applies to elected officials, but those who work for them in any official capacity. It also includes any witnesses for trials, hearings, or other official proceedings before any court, Congress, government agency, commission, or officer legally authorized to hear evidence or testimony.

The Foreign Corrupt Practices Act

In addition to the U.S. anti-bribery law, organizations with international business opportunities need to be familiar with the Foreign Corrupt Practices Act. Like the domestic law, this act was written to prohibit individuals and organizations from making, or promising to make, payments to officials of foreign governments with the intention of assisting, obtaining, or retaining business. It’s important to note that this includes non-monetary items of value, such as gifts.

Lastly, it’s important to understand that most states also have anti-bribery laws that cover state and local officials. While they all generally follow the same language as found on the federal level, it’s a good idea to become familiar with any laws in your state or any state where you plan to do gift-giving business.

Company gift policy examples

In addition to addressing laws that govern gift giving, such as anti-bribery laws, a business may also be governed by additional industry-based regulations. Here are some company gift policy examples within a few of the more regulated industries:

• Financial Services: The S.E.C. has clearly established regulations around what financial services professionals can accept. These rules were established back in 1940, but have been clarified and updated since that time.
• Government: Other laws relate to the gifting of government employees. Certain items like food, plaques, and other gifts are excluded.
• Pharmaceutical and Medical Devices: The guidelines around gifting in the pharmaceutical and medical industries have evolved over time. Drug and device manufacturers are now required under the Sunshine Act to submit data annually to the government, reporting any money paid to physicians or the monetary value of gifts.

What company gift policies typically include

While corporate gift policies may vary, there are a few items that are common to most. When you’re reviewing a prospect’s or client’s company gift policy, they typically include:

• Who inside the organization employees can give gifts to and the circumstances where it is and isn’t appropriate;
• Who outside of the organization employees can give gifts to and the circumstances where it is and isn’t appropriate;
• Policies around receiving gifts from coworkers, superiors, direct reports, and those outside the organization;
• What is considered “Generally Acceptable,” “Generally Unacceptable,” and “Unacceptable” in terms of gifts
• A maximum monetary value of gifts.

So what are generally acceptable gifts?

If you’re a recipient, make sure you thoroughly understand both the law and company policies around accepting and reporting gifts. Check with your company lawyer or accountant if you’re unclear. And of course, check with your HR or finance department to review the gift policies that might apply to you.

However, generally acceptable gifts are often limited to:

• Low-value items with the company logo (branded squeeze ball!)
• Meals
• And perishable gifts (ice cream sandwiches anyone?)

Sometimes, gifts will also need to be approved by a supervisor, which should be indicated in the policy as well.

In terms of what’s not permitted, corporate gifting policies often will indicate that their employees cannot give gifts:

• To government officials
• That are lavish and/or of high value
• That are of multiple quantities
• Or to anyone that could be considered a bribe (see the above definition), again intended to influence either a business decision or a government action (or inaction)

The above typically pertains to receiving gifts as well.

What’s more, gift policies dictate that employees are not allowed to solicit others for a gift or even charitable donations. That means that anyone sending a personalized note with their gift (of nominal value, of course) should take steps to ensure the gift cannot be misinterpreted as a bribe.

When it Comes to Corporate Gift-Giving Guidelines, Who and What Can You Gift?

When in doubt, be cautious and frugal. Gift limits can be set as low as $25 in some organizations. Most larger companies have established clear and specific gift policies as part of their codes of conduct.

Some gifts that meet many of these criteria include:

• Shareable items: This includes cookies, cupcakes, or even a team lunch. That way, an entire department can enjoy your gift and you can also build brand awareness among multiple people and not just your primary contact.
• Charitable gifts: Find ones especially if they tie to a cause that the recipient’s company is passionate about.
• Fun, unique, and low-cost items: Coffee gift cards are usually a safe bet, as are fun and useful gifts like customized socks. They are personal and often unexpected but deliver a “wow” factor. We love helping our customers brainstorm unique ideas that tie to the interests and passions of the people being gifted. Remember that you want the recipient to think, “That sales rep (or company) is clever, generous, and thoughtful” and not “Oh no…another trinket that I’ll give to my kids” or “This company is clearly trying to ‘buy’ my purchase decision.”
• Experiences: Gifting tickets to an event, whether in-person or virtual, accompanied by a small token of gratitude can be powerful if you are accompanying the client or prospect. But do your research—this may still be a gray area for many companies, especially if the ticket value is beyond the gift limit.

When in Doubt about Corporate Gift-Giving Laws, Simply Ask

Some companies like Coca-Cola publish their corporate codes of business conduct online, but there’s certainly no requirement for a company to do so.

Thus, if you ever have a doubt, don’t be afraid to ask! If a client or prospect rejects your gift, take the opportunity to clarify the company’s gifting policies. Apologize and reassure the recipient you’ll keep policies in mind for the future.

For some ideas on what to give to current or potential clients in highly regulated industries, check out our guide on how to give gifts that adhere to gift and entertainment policies.

A note about alcohol

Did you know that some states and countries will not allow you to send alcoholic gifts? As gifting experts, with one click we can halt your gifting efforts before any possible mishaps occur. (We’ll also help you comply with other gifting policies you might stumble into.)

Final gifting advice: so what can you still give?

Gifts for an entire department, shareable treats, and items that are low cost—but have high utility and perceived value—are the safest choices. Be prepared to let recipients know an item’s value. Many companies require recipients to publish reports listing the gifts they received during the holiday season.

Looking for ideas that adhere to gift giving policies? We’ve got you covered! As gifting experts, Sendoso has a wide selection of low-value, high-impact items designed to grab your prospect’s or customer’s attention – while staying compliant with gift policies and anti-bribery laws.

If you need assistance a step deeper, our Send Curation team, aka in-house gift-giving experts, can help you navigate your gifting strategies for even the most regulated industries. Even if your client or prospect has a no gift-giving policy, we can help. Contact us today to see how it works!

This article was originally published on December 4, 2020. It has been updated for relevance.

Disclaimer:  The above information is not legal advice, just general gift giving best practices. You are responsible for reviewing your client or prospect’s gift giving laws and policies and to meet compliance requirements when sending them a gift. Please consult with your legal counsel prior to gifting to determine how to best adhere with compliance obligations.

Nancy A Shenker is a marketing consultant, writer, speaker, and Sendoso brand ambassador. Prior to launching her own company, theONswitch in 2003, she worked as a senior executive for major brands, where she often gave (and sometimes, unfortunately, rejected) gifts.