If you manage a fuel card program for your company’s fleet, you know that both internal and external fraud can be significant sources of anxiety for your position and others who work in fuel management. Based on over 40 years of managing fuel card programs and working with fleet customers, Comdata spotlights best practices from fleet customers in managing and avoiding risk in their fuel card programs. Following these best practices can not only help you reduce the possibility of unauthorized transactions in your card programs, but can also help you to better manage your fleet fuel budget.
1. Set Transaction Limits
Controlling the number of transactions allowed on each card per day can help you to ensure that only necessary transactions are taking place on all of your fuel cards. When you set up your fuel card program, examine your history of card transactions – What is the typical number of transactions that your company runs each day? What is the average number across drivers? How often do exceptions happen that put you over those averages, and why do these exceptions occur? Make sure that your transaction limit is flexible enough to accommodate those exceptions, but not so high that exceptions won’t go unnoticed.
In addition to setting card limits, set your account for e-mail notifications to alert you when the number of transactions overall or per card has hit the limit or is nearing the limit. For example, if you set the transaction limit for one card for five transactions per day, you can choose to receive an alert when that card hits three transactions in a given day.
2. Set Dollar Amount Limits
Similar to setting transaction controls, you can also set a maximum dollar amount that each driver can spend per card, per day, per week, or per transaction. To do this, you will need to carefully examine your drivers’ normal spending patterns to fully understand what a reasonable limit might be. You may want to set the dollar amount limit slightly higher than the amount that your drivers typically spend to allow for the rare cases where unexpected expenses are necessary to incur.
As with transaction limit alerts, it is a good idea to set email alerts when your team’s spend nears the limit you have set. For example, if you set a card’s maximum daily dollar limit for $1,000, you can set an alert to notify you when that card has reached $800, thus allowing you to closely monitor that card and driver’s spending action. Many retailers are open to negotiating “better of” deals, where a retail less and a cost plus discount are determined, and the fleet receives whichever of these two discounts is less expensive. The box above illustrates how a fleet with a cost plus 5 discount, a retail less 3 discount, and a better of deal fares differently, according to fluctuating fuel retail and wholesale prices.
3. Understand Fuel Types
Comdata encourages customers to take advantage of advanced reporting on the types of fuel you are purchasing. Based on your set up, you can pull a variety of customized fuel type exception reports to help you manage your fuel spend.
You can also set alerts on your account for fuel exceptions. For example, if you choose to allow your drivers to only purchase Diesel 1 fuel, you can set an alert to notify you if a driver attempts to purchase regular fuel on the road. These alerts can help you recognize unauthorized spending before it becomes a problem, and can be sent to you immediately via e-mail.
4. Set Smart Driver Prompts
When setting up your cards, do not use vehicle numbers or any other easily accessible code to be the prompted ID that your drivers enter when performing a transaction. This is done more often than one might think, and makes it easy for an unauthorized user to steal your information and access your account. Assign individual cardholders their own prompting IDs, and avoid pin-pools where possible.
5. Understand Decline Activity
Decline activity is almost as important as approval history in that it completes the story. Understanding when and why your cards are being declined can help you mitigate risk by giving you oversight into when unusual events happen on your cards. There are many reasons for declines, all of which are related to how the account or card is set up. A card can be declined for anything from entering an incorrect driver ID to overreaching the limit for transactions you have set. Both of these declines can be signs of misuse or fraud, so it is important to understand why they are happening.
All declines are important to factor in when looking at a cardholder’s history. Too many declines can be a red flag that you should reevaluate your limits on each card or that your driver or a fraudster is attempting to test the limits of that card.
Set notifications to alert you by e-mail when a specific type of decline hits, or when your drivers hit a certain number of declines. Examine these declines to understand why they are happening – Are two drivers sharing one card? Has a card been stolen? Are your limits set high enough to support and grow your business? Is one of your vehicles experiencing maintenance issues? A history of high declines on a card means that something is wrong. Either the card or account has not been set up properly, or something is happening that is out of pattern for this card – either way, decline history can show you when action needs to be taken to reevaluate controls for your cards, or examine closely unusual spending patterns.
Too many declines can be a red flag that you should reevaluate your limits on each card, or that your driver or a fraudster is attempting to test the limits of that card.
Over time, you can search your reports for patterns. Does one vehicle spend more on fuel than another? Does one driver routinely spend more than others? Are you hitting your limit more often than you thought you would? These patterns can help you determine if you have a vehicle that needs attention, a driver who may not understand the purchasing process and guidelines, or even if you need to consider resetting your limits on your account. It all comes down to saving money.
Managing your fuel card program closely does not have to be as time-consuming as you might think. Finding a partner, such as Comdata, that uses state-of-the-art technology to monitor card transactions and send immediate alerts can help you to maximize the efficiency of your enhanced authorization controls program. It is important that you follow these best practices when planning your fuel and fleet budgets, as they allow you to more closely manage your fuel purchases and reduce any abuse or mitigate fraud on your accounts.