Should popular “consumer merchants” be used for business purposes? The answer is not always a simple yes or no. It depends on what an organization needs and what the options are for meeting those needs. The risks and potential controls should be evaluated before making a decision. One of the biggest concerns is the co-mingling of personal and business activities when an employee adds their P-Card to a personal account that they have with a vendor. There is a risk of the employee choosing the wrong card when checking out, causing personal purchases to end up on the organization’s bill. Keep reading to see additional considerations.

Amazon

Card program policies should prohibit the usage of “regular” Amazon to prevent the risk noted above. If your organization wants Amazon as an option, explore Amazon Business, which is a separate website designed for business-to-business purchases. It offers numerous types of controls and reports, which can help organizations manage the activity and provide insight into what your cardholders are buying.

To hear about another Amazon issue, watch the podcast I had the privilege of doing with Mary Schaeffer, AP Now.

PayPal

As a refresher, PayPal is a payment service provider. You set up a PayPal account and then add a card and/or bank account. When shopping online, if you see the PayPal logo during the checkout process, you can pay that way. The charges end up going to your designated card or account. Like Amazon, you can add more than one card to your PayPal account, so, here again, there is the risk of co-mingling personal and business.

When viewing transactions posted to your card, they will show the PayPal name followed by an asterisk and the real vendor name. This can make it harder to track the vendors used by cardholders. Of course, the answer here would be to audit every PayPal transaction, so your organization can see what cardholders are doing. This is most easily done via an auditing solution or even basic technology like Microsoft Excel.

Generally speaking, you should be able to directly use a P-Card with vendors instead of going through PayPal, so it would seldom be necessary to use PayPal in conjunction with business purchases.

eBay

A cardholder might think they are saving their employer money by purchasing from eBay. However, because anyone can sell something on this platform and there is the potential for complications, I would prohibit it. I do know of a couple examples where eBay was the only option for an organization to find what it needed, so there might be some policy exceptions.

Final Thoughts

Every organization needs to decide for itself the merchants/vendors that pose too much risk for their program. While I do not recommend having an excessively long list of prohibited vendors, it is logical to call out some, especially ones with whom your organization has already encountered issues.

Broad, beneficial statements to add to your policies would be something like these:

Prohibited Practices

• Adding a P-Card to, or using in conjunction with, any personal account

• Adding a personal card or bank account to an account designated for business purposes

• Receiving any type of personal rewards resulting from business purchases, except for certain rewards tied to approved business travel (e.g., airline miles), as outlined in the travel policy

Finally, promote your organization’s approved vendors, and train cardholders and managers accordingly.

See more about card program management and, for more on this particular topic, watch a podcast I did with AP Now.

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About the Author

Blog post author Lynn Larson, CPCP, launched Recharged Education in 2014. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…