Discounts and Rebates: Did that credit post to my account?

A friend of mine has a theory about high-end corporate credit cards. You know, credit cards with high balance limits. His theory is that vendors will run through charges on corporate cards for products and services that the cardholder didn’t intend to buy.

Maybe the cardholder plays golf at a club. Somehow, he or she ends up getting a charge on his card for a subscription to a golf magazine. Let’s say an office assistant handles corporate card expenses. The assistant sees the golf magazine charge and pays it. After all, the cardholder is a golfer- they must have intended to buy the magazine…..

As the theory goes, the vast majority of corporate cardholders won’t pay any attention to small dollar charges- they’ll simply pay them. A vendor might be making a lot of revenue, one small charge at a time. If you like conspiracy theories, that’s a pretty good one!

Pilot Flying J Allegations

Maybe there’s more to my friend’s theory than I first thought. You’ve probably seen-or even visited- Pilot Flying J truck centers. They serve trucking companies as a “one stop shop” for a trucker. In addition to fuel and food, they offer showers, electrical hook-ups for trucks, as well as truck maintenance.

Recent FBI allegations accuse a company of something very close to what I just described:  the allegations are that “Pilot employees engaged in a scheme to deceptively withhold discounts from customers to boost company profits and their own sales commissions.” (“FBI Raid, Fraud Allegations Rock the Trucking Industry”, Wall Street Journal, 4/21/13).

 “Among the allegations: a top company sales director allegedly altered spreadsheets to lower the rebates owed customers on a routine basis; that if a customer caught an employee in the alleged deception, the employee was to blame it on a computer glitch.” (bold and italic added).

The affidavit also asserts that “sale employees discussed the potential for a new internal Pilot two-tiered pricing structure that would impose higher prices on less sophisticated customers.”

How closely are you reading that credit or debit card statement?

A manager at one trucking company said “that the discounting is usually handled through credit-card processing”, rather than rebates issued by check. In either case, the message is clear to a business owner: Invest some time to check on those small transactions. Over time, they total amount might be significant. The article reported that Pilot Flying J has 3,300 trucking customers. Each of those customers may have dozens of trucks on the road. A lot of small transactions can add up to a significant amount of money.

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Ken Boyd

St. Louis Test Preparation

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