Our organization does not have a credit card, therefore staff members are refunded on program expenses. Fair enough. My dilemma arises when staff use their own credit card and collect points on those expenses. Is it ethical to collect points on expenses that are not your own? Is it ethical for staff to keep the benefit of the reward?
I heard this question several times back when the only points seemed to be air miles, and even then it was hard to see any way an organization could take points away from staff members. I hadn’t thought of it again until this question came in, but having mulled it over, I think it would be both unethical and unworkable to have employees hand over their points. Here are my thoughts:
1. Who created this situation?
Many nonprofits do have corporate cards and policies about their use. These cards reduce the need for staff to use their own cards, but have their own issues about costs and controls. Your organization made a choice not to go this route, leaving staff with few options. There are types of purchases, such as car rentals and online supply orders, that simply cannot be done without a credit card. The organization has asked them to use their own cards instead of a corporate one and has to live with its choice.
2. How could the points come back to the organization?
Loyalty and reward programs have become very complex, with a variety of points and other rewards, some of which depend on total spend and not the individual purchase. Some involve varying levels of annual fees, depending on the points or cash-back level a person chooses. Which cards your employees have will be affected by which stores and gas stations they shop at, and other such personal considerations. Your organization is not paying those fees or in a position to dictate those choices. And the choice may relate to having multiple loyalty or credit cards for family members, so it’s not just the staff member who is involved. Finding out which choices have been made, and what the results were for the staff member, could be deemed an invasion of privacy — after all, what right does an employer have to know such details?
3. How would the points come back to the organization?
Given the complexity, how would the organization receive the rewards? You would need policies, procedures and monitoring to see if employees remitted the appropriate cash-back rewards, minus the applicable percentage of the annual fee, at stated intervals. Reward points can sometimes be transferred online; how frequently would you require that? What about those that can’t be transferred; how would the organization receive them? Is it worth the amount of employee time to make this all happen, both for the staff member who used their card and for the accounting person who had to track the transfers? And will the rewards points even be usable for something the organization needs?
4. Who is taking the risk?
In the scenario you describe, the onus is 100% on the employee to make the payments to the credit card company. If the nonprofit has cash flow problems and fails to reimburse quickly, the employee still has to pay, or risk interest charges and possibly credit rating issues. If the nonprofit reimburses but the employee is a little late getting around to paying the credit card company, or cannot pay the full amount including personal charges, they may incur interest charges they cannot claim back from your organization. The employee may even have to defer personal purchases because the corporate charges are high enough to bump up against their credit limit. And what if the organization goes under without reimbursing at all? A small reward for taking these risks doesn’t seem out of line.
5. How will the handling of rewards points affect staff attitude and retention?
People rarely respond well to “nickel-and-diming” actions that interfere with results or simply annoy. If you require staff members to take time away from serving their community to calculate and remit credit card rewards, they will be angry. They may simply refuse to incur the charges in future, which could greatly hamper your work, especially if travel is involved. You could end up doing cash advances instead, which can be quite problematic to track and recover, and may cost you in interest revenue. Generally, they will think your priorities are all wrong. That will harm their loyalty to the organization, which could also mean higher turnover with all the attendant costs and temporary reductions in productivity that entails. Overall, I predict a financial loss from such a requirement.
6. Is there an alternative?
The are several, I believe. All involve voluntary action, without any pressure, rather than onerous policies.
One is to encourage employees who believe they have been too generously compensated by the credit or loyalty card companies to consider that when and if making a donation to your organization. They may also be more willing to volunteer for you, perhaps at special events outside their normal work duties.
Another is to make sure they know that unused points, gift cards, etc., can be donated to certain charities online; the details are specific to each credit card company. Perhaps your charity can get on the list. There are also points-swapping sites when ones of more value to your organization might be obtained, if and only if the employee freely chooses to check these out.
Overall, I see the best option as being sure to thank the staff members for their willingness to use their own cards on your behalf. Remember to also process the reimbursements quickly, even when cash flow is tight. They’ve gone out of their way for you, and they didn’t have to. Show gratitude.
Since 1992, Jane Garthson has dedicated her consulting and training business to creating better futures for our communities and organizations through values-based leadership. She is a respected international voice on governance, strategic thinking and ethics. Jane can be reached at jane@garthsonleadership.ca.
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