Why Employee Use of Personal Cards is a Gamble

If your organization still allows employees to use their personal cards for business expenses and then get reimbursed, it is worth another look. Have you considered the risks lately? Early last year, I wrote about a couple ways in which fraud might occur with this approach. Namely, the employee could benefit financially by submitting the same expense more than once or by cancelling a business trip, but still pocketing the reimbursement for a reservation (e.g., airfare, conference registration). Now I am adding another type of fraud to the list. Keep reading to see if your organization is aware of the following risk.

The Receipt Risk

When an employee seeks reimbursement by submitting a receipt that the supplier provided electronically, the employee can change the dollar amount. It doesn’t matter if the receipt is an email (no attachment), such as what Uber provides, or if the receipt is an emailed PDF attachment, such as what a hotel sends. Both can be edited; I verified this firsthand.

When I edited a PDF from a hotel, a pop-up message alerted me that the file was read-only and had to be saved as a new file. Just one easy, extra step…

The Answer

While receipt tampering can happen regardless of the card used—personal card or company card—use of company cards (Commercial Cards) with corporate liability/corporate pay offer controls. Since there are no reimbursements to employees, there is no motivation for an employee to change a dollar amount on a receipt. Accounts payable uses the card issuer’s central bill to initiate payment for all cardholders’ transactions.

If the program has an individual liability/pay arrangement (as some Corporate Travel Card programs do), your organization still has the ability to independently view and verify actual transaction amounts through the card issuer’s technology. It would be possible to catch receipt tampering prior to reimbursing the employee. However, this is a mostly manual exercise that could quickly consume significant time.

The bottom line is, to prevent employee fraud, it is critical to have transaction visibility and to eliminate employee expense reimbursements to the extent possible.

Related Resource

The other fraud risks that I mentioned in the introduction above are described within the 2017 blog post, Why Mandate Card Use for T&E. It also includes another drawback of not having a Commercial Card program for business travel.

Is your organization willing to gamble (and lose) by allowing employees to use their own cards and get reimbursed?

Is your organization willing to gamble (and lose) by allowing employees to use their own cards and get reimbursed?



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About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more