I am working with a client that pays for a corporate credit card for employees to use only for company business. The company pays the card but it is not a master company account so each individual account is collecting the rewards. All the employee's travel except airfare goes on their individual card and the airline is accumulated under one card maintained by the President's EA. The company would like to be able to use the points / rewards but controlling them would be very difficult since they don't own the points in a master account. While the use of the points / rewards would have some positive impact of travel, it would not be significant. I am interested in how other companies are handling reward / points with their staff and executives that travel extensively. Points back to the company or allow individuals to keep them as a benefit for traveling for the company? Thanks.
Credit Card Points / Reward Policy
Answers
Dan:
You state that the company pays for the corporate card, and all charged items are only for company business. Therefore company policy should simply state that any rewards should be used only for company benefits, and employees should not use rewards for personal benefit.
To do otherwise, is the equivalent of stealing from the company.
Related question...what is the President doing with the points earned on his card, including the airline charges? Is this a public company, or private?
3
Sorry, John. Using points earned while traveling for the company for personal use is not theft. Most companies recognize that their “road warriors” earn a much deserved vacation for their families after being away from them for so long on business – by using points for airfare or hotels. It is perk, a deserved one.
I am often surprised that the purchasing department or
Karoline:
Sorry? Sorry for what? You are rationalizing theft of company property!
The company paid for the travel and any discounts earned via rewards points are the property of the company. They should be applied to the company's future travel endeavors and are not the the employee's to take without express permission.
I worked for a company where a VP was taking flight discount coupons from the CEO admin's drawer so he could get discounted flights to go see his girlfriend on the weekend. He was charged with theft and fired. Was that wrong? If so, you'd better tell the DA who, when informed of the activity, brought charges against the perp.
If a vendor offers me 15% off a purchase, can I "pocket" the discount because I worked so hard to get the discount? How about those box seats at the football game that vendors are known to offer as an incentive to purchase? Should I accept those because I work so hard?
How about swiping a few batteries from the store room for your flashlight at home?
How about that obsolete inventory sitting in the back of the warehouse? It's a big company. They make lots of money. They'll never miss it. I can take it and donate it to my church or something useful like that.
What about the income
The lack of ethical thinking here and rationalization for self dealing is amazing. I expect much more from finance professionals. If this were a salesman's forum, I wouldn't be surprised. :-(
The airline charges (a majority of the points) go on the President's Executive Assistant's card and we are planning a procedure where those points can be used for travel or company office needs. The President travels extensively and the current plan calls for his points to be treated like any employee with a corporate credit card. The points for use on airlines and hotels must be converted to points via the associated airline / hotel frequent stayer program and the President's EA doesn't have access to those individual logins. There is also the issue of commingling personal and corporate points in those frequently flier / stayer programs. My concern is that tracking the accumulation and controls associated with proper usage will out-weigh the savings. If they would change to a plan where all the points roll up to the company, the issue would much easier to administer and control.
Thanks.
Employee should have access to the points especially since traveling is likely part of job requirement and from an employee relations perspective, the message conveyed in such a policy is more a negative than the savings it generates. With work life balance issues in today's workforce, extensive travel may not be viewed as perk.
1
I have to disagree Ms. Kazan being in a position where I have to deal with this currently. And, I'm struggling because the biggest abuser is our CEO who sees nothing wrong with this and even brags about it.
Just last week one of our VPs received a "gift" from a credit card vendor and decided they wanted to keep it. When I revealed that the same vendor had been sending me gifts for a while despite my protestations and that they were piled in a corner of my office awaiting the next visit from the their sales rep because I was going to make her take them back, our CEO sent the VP down to my office to collect said gifts for himself.
Right now, I'm trying to figure out how to remind him, without losing my job, about the time we were subpoenaed in an FBI investigation of exactly such behavior by a nationwide vendor to government agencies and why we shouldn't even be considering accepting these bribes.
Geez! Isn't anyone in business honest anymore?
Some of our execs, using your logic, have been accumulating rewards and using them personally. Only, this has incentivized them to choose certain hotels and airlines to ensure their "points" for personal use and not necessarily the ones that provide the best rates to the organization.
These people are not forced to travel. In fact, with our liberal travel policies, per diems and few controls, many are really doing nothing but junketing, combining conference "opportunities" in destination cities with personal vacations. They even brag about these being "like vacations"!
The company pays for all of their travel expenses. The rewards belong to the company. It's that simple. Employees can earn rewards on their own accounts.
I agree with Malak that employees have expectations.
However, employees receiving points may make business travel spending choices based on their personal points program of choice, instead of lowest price to their employer or most convenient for business or even if the trip was really absolutely necessary in the first place.
I have a hard time seeing how such arrangements are different from employees receiving cash gifts from a supplier to spend company money with the supplier.
What exactly is the difference?
This would be the case even if work involves travel that may not be viewed as a perk, as lots of duties about work are not perks.
Dan:
I posted a similar question about AMEX rewards not long ago seeking advice on how to control the rewards. Since that time, AMEX has informed me that they have changed their system such that I can ensure that all rewards are useable only by the organization and not the individuals.
What I've found in setting up an AMEX corporate program like this is that AMEX is going out of their way to encourage heavy card use directly to the employees who have the cards. Offering access to rewards on their accounts is one of the ways they are trying to promote a higher usage of the card.
This can be directly contrary to the organization's best interests and probably violates policy. And, as in the example I provided elsewhere, it bypasses standard controls and purchasing departments all together.
In the public sector where I reside, it can be a violation of federal laws and regs. If it crosses state lines, the FBI might even get involved. Ask me how I know. :-(
For me, I would stay as far away as possible. Finance people get criticized enough for watching small items too much and missing the big picture. Unless you are under financial duress, let the employees keep the reward points. NO matter how hard you try to make this sound fair to the company, employees will not see it the same way.
1
Income tax liability?
A company is under no obligation to reward employees with points for doing their jobs - "road warriors" or not.
When I was a heavy traveler, any points were accumulated at the Corp account level but we were able to link our business cards to our personal cards for a small fee (this was Amex). That made me happy but it never would have occurred to me to treat the points I accumulated as an entitlement.
I agree with Jack Judd's observation overall but if you identify compelling reasons to switch credit card vendors, and ensured your company kept the points as part of said switch, the feelings of your business travelers ought not weigh too heavily on that decision.