Do You Treat All Cardholders Equally?

Word gets out if you treat cardholders differently—particularly if you allow some to get away with breaking the rules. One risk is cardholder resentment, which can shine a poor light on the program. Even worse, it can lead to card misuse and abuse by the “favored cardholders” who know they can likely get away with it. As such, it is critical to consistently enforce card program policies and procedures, regardless of an employee’s job role/position. This requires some planning, so following are three action items to support this Commercial Card best practice. 

Three Action Items

1. Determine the Consequences for Non-compliance

To prevent a debate over what to do every time a rule is broken, identify the appropriate action up front. Consistent consequences are part of consistent enforcement, but they should be based on the severity level of a particular infraction. Consider the different types of issues, which vary widely. Examples include:

  • ordering a higher quality good than what is allowed
  • using a non-approved vendor
  • late reconciliation of transactions
  • missing or vague receipts; some organizations offer a “missing receipt form” for cardholders to complete, but be aware that receipt issues could indicate fraud
  • personal use of the card that the cardholder presents as a legitimate business transaction; in other words, fraud

Some things might warrant a warning and/or additional training, but it could depend on whether it is a cardholder’s first offense or part of a repeated pattern. Fraud should be grounds for termination and never tolerated.

Ensure you also decide how to address the “approving manager” associated with a non-compliant cardholder. After all, they fulfill an oversight role. Their sign off on cardholders’ transactions represents that the transactions are legitimate and comply with program policies and procedures. 

2. Create Template Email Language

Besides ensuring a consistent message when communicating an issue, having a ready-to-use template speeds up the process since you will not have to start from scratch. The tone of the email should align with the severity of the issue, as well as your organization’s internal culture. Before finalizing the template, obtain approval from management. 

3. Establish a Way to Track Infractions

Finally, tracking infractions by cardholder provides documentation to support the consequences. In addition, the ability to review and filter infractions organization-wide can help instigate change by highlighting: 1) possible gaps in the training and/or 2) unclear/vague policies and procedures.

See more card program management content from Recharged Education.

Do your communications with different cardholders all add up to be the same, consistent messages?

Do your communications with different cardholders all add up to be the same, consistent messages?



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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

Herding Cats, uh, Cardholders

Every Commercial Card program has at least one challenging cardholder. I’m willing to bet, though, that this statement is conservative. What can make cardholder management so difficult at times? For one, it is an interesting dynamic when you need people to follow policies and procedures, but you are not their manager. Several years ago, I heard Julie Miguel, CPCP, Purchasing Card administrator, Tension Corporation, use the phrase “herding cats” in relation to cardholders. Her good insight is shared below, in addition to tips from Jennifer Hart Barb, program administrator, James Madison University. The advice is grouped into four broad recommendations, including: 1) review your program structure for best practices, 2) consider the cardholders, 3) utilize effective communication, and 4) determine what you can control.   

Review Your Program Structure

Are aspects of your program helping or hurting your cardholder management efforts? For example:

Jennifer Hart Barb stresses, “Management needs to agree, in advance, that they are willing to apply consequences even if a cardholder is good at their ‘real’ job.”

Consider the Cardholders 

Jennifer provides a good reminder that most cardholders are not “fiscal people” and their minds may not work like yours. Try to understand cardholders’ core jobs and anticipate potential challenges. One example is a Facilities Maintenance team whose focus is on the building. Because they are not typically sitting at computers, reconciling transactions can be challenging. One possible solution is assigning a proxy to do the task for them. She has also had success in:

  • conducting a separate, in-person training session for one department to increase their comfort level
  • doing weekly audits to give cardholders timely feedback and help prevent the same mistake multiple times within a cycle

Julie Miguel has found it beneficial to identify the recurring situations that generate the most headaches and the characteristics of the cardholders who typically cause these situations. From there, she developed different approaches, including vigilance and clear communication (e.g., reports to managers, emails to cardholders), which leads to the next point.

Utilize Effective Communication

Your communication efforts can go a long way toward working with cardholders. Jennifer recommends being consistent in your answers and says, “If you encounter an argumentative cardholder, avoid engaging in a back-and-forth debate. Ensure there are documented policies and procedures to support your stance.” She acknowledges that it’s easy to jump to conclusions when dealing with a “problematic” cardholder, which is why consistency is so important. Using template emails is one solution.

If managing cardholders feels a bit like herding cats, then examine your program more closely to identify any contributing factors.

If managing cardholders feels a bit like herding cats, then examine your program more closely to identify any contributing factors.

Adding to what Jennifer and Julie suggest, I formed good relationships with cardholders by doing the following.

  • Be accessible. Per a previous blog post on adding a human touch to program management, take advantage of opportunities to simply say hello to cardholders and ask how things are going.  
  • Be an ally. Acknowledge you are both in the same boat in having to uphold organization rules. Neither of you might agree with some rules, so take the approach that you are trying to help them comply. 

Determine What You Can Control

Should some rules be changed? If so, are you authorized to do so? Julie described to me how one cardholder’s tardiness with reconciling used to hold up the entire accounting process. This drove them to adopt default accounting codes that allow the process to occur on time, forcing the cardholder and their department to correct any coding mistakes.

However, some things might be rooted in corporate culture that executives are unwilling to change. Julie concedes, “My program is not perfect, but it is not within my power to make it perfect.” She also admits, “Since I have managed the program from the beginning and have an emotional attachment to it, I would take cardholder misbehavior as a personal affront. I’ve had to work at moderating my responses. It also helps to maintain a sense of humor.” I agree! 

See more about P-Card program management.


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

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Inactive cardholders can hinder your game plan.

Got idle cardholders? There is a risk to having unused cards laying around who knows where. In addition, if your rebate incentives are impacted by average net spend per card, inactive and under-utilized cards will drag your program down. Reviewing and addressing inactive cardholders at least annually is a best practice that contributes to optimal program health. However, there are also things you can build into your program design to ward off issues in advance. Following are suggestions for both pieces.

Program Design Elements   

Determine your stance on “backup” cardholders. Does each department really need one or more cardholders on standby? If a backup is called upon to use their card, they will actually remember the card program policies and procedures? Instead of having backups throughout your organization, could a designated department like purchasing or AP fulfill a backup role?

Define within your policies and procedures what “inactive” means; for example, a P-Card without transactions for nine consecutive months or fewer than three transactions during the fiscal year.

Add a stipulation to your internal agreement that your organization reserves the right to close inactive cards.

Ensure the card program manager/administrator (PM/PA) receives notifications from HR about employee status changes that could warrant closing their card account. This will assist your proactive efforts in managing cardholders.

Document the process the PM/PA should follow as part of the annual review (see next section for suggestions). For the sake of consistency, you could even prepare a template to use when contacting inactive cardholders. Also decide if a department manager can overrule any recommendations to close an inactive account.

Take steps to help make all cardholders active. (Photo by  Mpho Mojapelo  on  Unsplash )

Take steps to help make all cardholders active. (Photo by Mpho Mojapelo on Unsplash)

The Annual Review

Do not automatically close inactive accounts. First figure out what is going on and then take appropriate action; following is a suggested process. 

  1. Generate a report, by department or by manager, of cardholder activity.
  2. Identify the cardholders who meet your criteria for “inactive.”
  3. Review the department overall to see if their card performance meets predefined goals or expectations.
  4. Contact the cardholder and/or manager to further research why the cardholder is inactive. Does their role involve making purchases or paying bills?
  5. Make a determination about how to address the inactive cardholder(s). If their department is performing well as a result of other cardholders, then the inactive card account might not be needed. If the department is under-performing from a card perspective, then take a more holistic approach. Do their cards need higher limits to accommodate their purchasing needs? Would additional training be of benefit?
  6. Retain documentation related to the decision.

See 15 other annual tasks for card program fitness


About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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