Card misuse occurs when an employee purchases an item that is not for the benefit of the entity. Misuse insurance for losses of $100,000 per cardholder, per incident is provided if the city distributes a minimum of five cards (There is coverage for a $25,000 loss if there are 2-4 cards). An employee must be terminated in order to collect on the policy.
Controls and Protection
The primary spending control limits the transaction size of each individual purchase. A second control limits the total dollars purchased during any billing cycle. By blocking certain merchant classification categories, your city can restrict the type of supplier from whom cardholders can make purchases. Optional controls include velocity limits, multi-tiered restrictions and store-front blocking. Access to ATM machines is easily blocked as well. Typically, program administrators employ one of more of these controls to limit exposure.
In addition to your city benefiting from implementation of the NLC P-Card Program, your valued suppliers will benefit as well. Some of the benefits they will realize include: