Short answer: In a scrip program, the parent group buys gift cards at a discount and sells them to families at face value, keeping the difference. Receipt and rebate programs pay the school a small share of purchases families link or submit. Both raise modest, steady amounts with no selling, but they need a volunteer to manage orders and cards. A scrip purchase isn't a donation, and earnings should go to the whole group, never to a particular family's balance.
This guide is part of school fundraising ideas compared. Scrip and shopping rewards programs belong to the "passive" end of that list: families buy groceries, gas and gifts as usual, and a slice of the spending comes back to the school. That's appealing to parent groups tired of selling. It's also easy to overestimate. This page explains how the two kinds of program work, what they realistically bring in, and the tax and money-handling questions to settle first. We don't name or recommend any program; compare the terms of any you consider using the questions below.
How scrip works
"Scrip" here means gift cards bought and resold for fundraising. The parent group buys cards for stores and restaurants from a scrip company or directly from retailers at less than face value. Families buy those cards from the group at full face value and spend them as they would cash. The difference between what the group paid and what families paid is the group's earnings.
- Families pay nothing extra. A $100 grocery card costs $100 and buys $100 of groceries.
- The discount varies by retailer. Programs publish a rate for each card, and rates change. Everyday spending such as groceries and gas often earns a lower rate than restaurants or specialty stores.
- Cards come in forms. Physical cards are ordered in batches and handed out; electronic cards and reloadable cards can be delivered by email or app. Each has different handling and loss risks.
- Money moves before cards do. The group pays for the cards it orders, so it needs families' payments to have cleared first, or cash on hand to carry an inventory.
How receipt and rebate programs work
Rebate programs don't involve buying anything from the school. Families shop as usual and connect the purchase to the school in one of a few ways:
- Linked store accounts. A family links its loyalty or shopping account to the school, and the store pays the school a share of eligible spending or a set amount per period.
- Receipt submission. Families scan or upload receipts in an app, and participating brands credit the school for qualifying products.
- Clipped labels or codes. Families collect labels or codes from packages and the school sends them in.
Rebate programs need less handling than scrip, since no money passes through the parent group until the program pays out. But the per-family amounts are usually smaller, programs change their terms or end, and some pay only after the school reaches a minimum. Read the privacy terms too: linking a shopping account generally shares purchase information with the program, and some families won't want that. Make every program clearly optional.
Scrip and rebates compared
| Scrip | Linked accounts and receipts | |
|---|---|---|
| Who handles money | The parent group: orders, payments, cards | The program pays the school directly |
| Cash needed up front | Yes, unless every order is prepaid | No |
| Volunteer work | A coordinator, plus a second person for counts and reconciliations | Promotion, reminders, tracking payouts |
| Earnings per family | Grows with how much families shift to cards | Usually small |
| Main risks | Lost or stolen cards, unpaid orders, crediting families | Program changes, payout minimums, privacy concerns |
What they realistically raise
Scrip earnings depend almost entirely on how many families make it a habit. A few committed families who buy their weekly groceries in cards produce most of the money; occasional holiday buyers add little.
Example 25 families each buy $500 of cards a month at an average 3% rebate: 25 × $500 = $12,500 a month, and 3% of that is $375. Over a ten-month school year that's $3,750. If only 10 families keep it up, the year brings in 10 × $500 × 3% × 10 = $1,500. A December push where 60 families each buy $200 of holiday gift cards at 5% adds 60 × $200 × 5% = $600.
Example 200 families link a store account, and the program pays an average of $1.50 per account each quarter: 200 × $1.50 = $300 a quarter, or $1,200 a year.
Compare those totals with the volunteer hours involved, then with what a single event raises in the profit calculator. For many schools, scrip and rebates are a useful extra alongside a main fundraiser, such as a walk-a-thon, not a replacement for it. The no-selling fundraiser guide compares other options that don't involve products.
Scrip is a purchase, not a donation
IRS Publication 526 says that when you receive something in return for a payment to a charity, you can deduct only the amount above the value of what you received. A scrip purchase buys a gift card worth exactly what the family paid, so nothing is left over to deduct: don't treat it as a donation, and tell families to ask a tax professional before claiming anything. Don't describe scrip purchases as gifts in your letters, and don't send donation receipts for them.
The individual accounts risk
Some scrip and rebate setups credit earnings to the family whose purchases produced them, for example toward that child's tuition, trip cost, activity fees or a booster account. It's an easy sell ("your shopping pays your fees"), and it's the setup most likely to cause a tax problem for an exempt parent group, booster club or school foundation.
A group's fundraising that pays down particular families' own costs can be treated as private benefit rather than an exempt purpose; the clubs and teams guide on pooled funds explains the rule and the court case behind it. That case concerned family fundraising credits, not scrip specifically, but the same concern arises when rebates follow a family. If your program credits earnings to particular families, talk to your accountant before the next school year. This is general information, not tax advice.
The straightforward fix: pool all earnings for the whole group and spend them on things every student shares. You can still thank top participants as a group without tying money to a family. Private schools that apply scrip toward tuition should raise it with their business office and auditor; a tuition assistance fund that every family can apply to is the usual alternative.
Running scrip without losing cards or money
Gift cards are as good as cash, and they can be lost, stolen or spent before they're paid for. Treat the scrip program like a cash box that's open all year:
- Prepay only. Families pay before the group orders, and cards go out only to families whose payment has cleared.
- Order on a schedule. A fixed order day, such as every other Monday, keeps the work predictable and limits inventory.
- Two people, every time. Count incoming card shipments and outgoing orders with two volunteers, as the cash handling guide describes for money, and record payments on a cash count sheet.
- Sign for pickups. Families or their named adult sign when they collect cards. Don't send physical cards home in backpacks.
- Lock up inventory. Keep any stock in a locked place at school, not at a volunteer's home, and keep it small.
- Reconcile monthly. Cards ordered, cards delivered, payments received and earnings should all match. Report the result to the board and in the treasurer's report.
- Get school approval. Ask the principal whether district rules allow gift card sales on campus and whether staff may take part. The district approval guide lists who usually decides.
Is a scrip or rebate program worth it?
- We have one dependable coordinator and a backup for scrip, or we're choosing a rebate program that needs no money handling.
- Our earnings estimate uses a realistic number of regular families, not the whole school.
- Every family's purchase or link is optional, and we'll explain the privacy terms.
- Earnings go to the whole group, and no family's balance is credited.
- Our letters call scrip a purchase, not a donation.
- We know the program's terms, rates, payout minimums and how to leave it.
If most of those are true, a program can run quietly in the background all year. If not, put the energy into one well-run event instead.
Sources
- Publication 526: Charitable Contributions (2025), Internal Revenue Service (accessed 2026-10-30)
- Publication 1771: Charitable Contributions, Substantiation and Disclosure Requirements (Rev. 11-2023), Internal Revenue Service (accessed 2026-10-30)
Frequently asked questions
Is buying scrip tax-deductible?
Treat it as not deductible. A scrip purchase buys a gift card worth what you paid, so you received full value and there is no gift in the usual sense. Groups shouldn't describe scrip as a donation or issue donation receipts for it, and families should ask a tax professional before claiming anything.
Can scrip earnings go toward my child's tuition or fees?
This is the setup to avoid in an exempt parent group or booster club. Crediting each family's fundraising toward that family's own costs can be treated as private benefit and put the group's exemption at risk. Pool scrip earnings for the whole group, and if your program already credits families, talk to your accountant before the next school year.
How much can a school make from scrip?
It depends on how many families buy cards regularly and how much they spend. A handful of families buying weekly groceries in cards can produce most of the earnings, while occasional buyers add little. Estimate from a realistic number of regular families and the program's actual rates, and compare the result with the volunteer time involved.
Do receipt and rebate programs raise much?
Usually a small, steady amount. Payments per family are typically modest, some programs pay only after a minimum, and terms change. They're worth running when they cost volunteers little effort, as an extra alongside a main fundraiser rather than in place of one.
Who should handle the gift cards?
A named scrip coordinator with a second volunteer for every count. Families should prepay, cards should be released only after payment clears, and pickups should be signed for. Keep inventory small and locked at school, and reconcile orders, payments and earnings each month.