Media coverage of the Meitivs—the Maryland parents who have been in the news for allowing their two children to walk home alone from the park—has pushed the concept of free-range kids into the spotlight. It occurred to me that Purchasing Card programs have experienced an evolution similar to parenting. Increasing precautions is the new norm, but is it the right one? I think there is room for some free-range thinking about card program management.
Protection Has a Cost
Earlier this week, Star Tribune columnist Gail Rosenblum observed that, years ago, the so-called free-range parenting style was simply part of a normal childhood. Further, she wrote, “…Western kids never have been safer in countless ways. And more unwittingly endangered in another. In response to the uproar over her free-range actions, she [Danielle Meitiv] spoke of her distaste for how parents today ‘imprison our children inside and wonder why they’re obese and have no focus.’ By trying so hard to protect our kids, we’re cheating them of the coolest part of being a kid.” Read the complete article...
To rewrite that paragraph for P-Card programs:
Robust data-mining/auditing technology and the adoption of EMV cards have taken controls to a higher level, adding to the long-standing fraud protections and chargeback rights associated with cards. Yet, organizations are endangering card program growth when they remain rooted in heavy restrictions or have scaled back what is allowed. They have strangled usage and wonder why they are not seeing the expected card benefits. By trying so hard to protect against fraud, organizations are cheating themselves of the process savings and rebates.
Status of Your Organization
In the past, I have written about both extremes—over- and under-controlling a P-Card program. Where does your organization fall on the spectrum? If you’re right in the middle, that is ideal. How do you know? Evaluate your current controls. Conducting a risk assessment (and taking the necessary follow-up actions) should help you avoid the two broad risks:
- a lack of effective controls, which increases the likelihood of fraud, misuse and abuse
- applying too many controls, which are costly and impact the process savings inherent to P-Cards
Structure your controls to lock in P-Card benefits and help keep the program protected from fraud, misuse and abuse.
Free-range card programs do not lack controls. Rather, it means management is familiar with, and employs, the effective measures that curtail risk while still allowing the program to grow and succeed.
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…