What we can do to avoid unauthorized charges from hitting our credit cards? Does it make sense to hold off paying our invoices each month in case we have situations where we need to receive credit for an unauthorized charge?

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We have not seen one particular practice that seems to work in most all situations. However, below are some of the practices used by member companies.

  • Signed acknowledgement by all employees issued a PCard that personal and unauthorized purchases are prohibited. The warning can include wording that indicates a consequence could result in termination. See an example P-Card Agreement in the Tools section.
  • An article titled "How to Tighten Control of Your P-Card Program" provides some practical tips on controls over improper use and what is considered best practices in many situations
  • An article on Bnet about fraud with p-cards and tips.

Here are common tips regarding the prevention of unauthorized use.

  • Have written policy and procedures (see P-Card Manual at TAPN).
  • Have an acknowledgement agreement for conduct on the use of the P-Card for each cardholder (see above)
  • Clearly communicate who can approve transactions and who reconciles transactions Only allow original receipts
  • Make sure the card can be clearly distinguished from other consumer cards (e.g., have a bright colored card with your companies logo or trade name clearly on it so it can't be mistaken by a cardholder as a personal card)
  • Keep card limits reasonable
  • Provide an anonymous hotline
  • Have a recurring audit process

Another option used by some companies is to have the burden of liability on the cardholder such that the employee is liable for the payment to the vendor and you are merely reimbursing the expense. This allows you time to review all the charges with original receipts and not make payments prior to your review. This may not be necessary in your case if you have only had one instance of an unauthorized use in 4 years.

Your question is also a good one to post to the Messaging/Forum section of the site to get feedback directly from your peers on how they are handling these types of transactions.

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