Why Mandate Commercial Card Use for Travel

Far too many organizations of all sizes still allow employees to use personal cards and get reimbursed. Some do not have a commercial card (e.g., corporate card) program at all for business travel expenses. Others have such a program, but do not require employees to use it. Past survey results from AP Now have revealed only 40–45% of card-using organizations mandate commercial card usage for business travel. Further, a 2022 survey by the Professional Development Group (PDG) of their higher education audience show that nearly 70% of respondents’ institutions allow the usage of personal cards for travel expenses.

What does your travel policy say on this topic? If you are among those that make commercial card usage optional, or if you require employees to use their own cards, you should reconsider. Take a look at the list of cons below and share with your internal decision makers. Some of them might be resistant to a policy change because they want to earn rewards associated with their personal cards. However, lack of a mandate could be costing your organization.

Related Resources

• Travel expense management

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Employee Hardship

Organizations that do not offer a commercial card and, therefore, force employees to use personal cards, might be putting some employees in an awkward position. Not everyone has the means to pay out of pocket up front for some or all expenses. Here are two examples shared with Recharged Education:

• One reader described how, in a case like this at his company, the employee’s manager had to use her personal card to pay for some of the employee’s travel expenses. His company also had to create a cash advance for the employee—even though they do not have a cash advance program—so the employee could pay for meals and incidentals.

• A professional in the higher education industry said they had an employee who had to pre-pay for a hotel stay in advance of attending a business conference. The institution decided to give the employee an advance on his pay and then have the employee follow the usual expense reimbursement process after the trip.

Inefficient, to say the least.

Increased Fraud Risk

Following are three examples, but there certainly could be more. In addition, while not outright fraud, an employee who uses their personal card for business travel may take more trips than what is necessary in order to earn more personal rewards.

Submitting the Same Expense Twice for Reimbursement

For example, an employee who uses a personal card could submit a reimbursement request for airfare:

• soon after making the purchase—to avoid a financial burden in conjunction with paying their personal credit card bill, and

• again after the trip is complete

Catching the fraud is up to the approving manager, who might not remember the initial reimbursement request, as the timing gap is likely weeks, if not months.

Cancelling a Trip After Getting Reimbursed

An employee could book a trip (airfare, conference, etc.), pay for it out of pocket, and request reimbursement. Meanwhile, he or she could cancel the trip and pocket the money. If the employee used a company/commercial card (with corporate liability), the refund would automatically go to the company.

Altering Receipts to Get a Higher Reimbursement

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) or if the receipt is an emailed PDF attachment, such as what a hotel sends. Both can be edited.

While receipt tampering can happen regardless of the card used—personal card or company card—use of 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.

Lack of Visibility into Expenses

When employees use their own cards, your organization:

• Cannot view or verify their expenses, which hampers fraud prevention and detection efforts

• Cannot easily identify expenses ideal for strategic sourcing initiatives

• Will have a hard time dealing with cancelled trips and travel credits, such as what happened when the pandemic first hit in 2020

Tedious Expense Reimbursement Process

Instead of making one monthly payment to the card issuer, accounts payable has to make separate payments to each employee. Depending on your organization size and the number of business travelers/trips, this could amount to hundreds of payments each month. A card mandate could save your organization time and money.

Losing Out on Potential Rebate 

Commercial card programs of all types are often eligible to earn revenue sharing (rebate) incentives. When there is not a mandate to use the cards, spend is not maximized. If you have a card program today, work with your card issuer to estimate what your rebate could be if all travel expenses shifted to the cards.