What Are Granular Spend Controls and How Can They Help Your Business?

For employers who issue corporate cards to their employees for business expenses or distributing reimbursements and paying out perks, there can be anxiety about what these cards are really used for. When employers have to manage the inconvenience of tracking the cards, receipts, and purchases of potentially hundreds or thousands of workers, it’s easy for questionable and even fraudulent expenses to fall through the cracks.

Managers and HR personnel know that one way to circumvent this anxiety is to match the receipts with the purchases. However, this represents a huge amount of administrative overhead, and receipts can be lost and purchases confused. Indeed, expense fraud is estimated to cost employers $2.8 billion annually.

What if there was a way to stop these personal purchases in their tracks, before employers have to deal with the headache of missing funds or receipts?

There’s one viable solution that’s convenient and effective: reloadable debit cards with Granular Spend Controls.

What Are Granular Spend Controls?

Granular Spend Controls describes when employers apply restrictions to the categories of merchants that a card can be used to purchase from.

Every merchant has a unique category code, referred to as a Merchant Category Code (MCC). In the context of expenses and perks, different types of merchants are distinguishable by their MCC. For example, a restaurant has one MCC, while a gym or fitness center would have another.

With Granular Spend Controls, you can specify certain categories of merchants at which a card can only be issued – or vice versa. This can help prevent prohibited products or services from being purchased entirely.

The challenge is that most traditional credit card issuers do not allow a high level of spend control for employers.

And that’s where reloadable debit cards come into play. The difference between these cards and corporate cards is that if an employee uses this card to buy a product or service outside of their dedicated purpose, the transaction will be declined. In short, a card with these spend controls lets employers have significant and granular control over what their employees are purchasing with their issued cards.

Examples of purchases that can be controlled:

Having the power to ensure your employees can only purchase items or services that they approve is valuable, but what are some specific examples of how this can be used?

Here’s a short list of purchases these protected cards can safely oversee:

  • Gas or other utilities
  • Food products
  • Office supplies
  • Caterers
  • Hotel rooms
  • Technical equipment
  • Insurance premiums
  • Books, periodicals, newspapers
  • Education
  • Various perks, from cell phone reimbursements to gym stipends
  • And more!

For example, if your business distributes cards for employees to pay for gas, then you could use granular spend controls to ensure employees can ONLY use them at gas stations.

If you wanted to offer it for any form of electronics reimbursement, this type of card could also be easily configured so that it is only allowed at specific retailers. Almost every type of store or service you can think of has a unique code available for applying spend controls.

Benefits of Employee-Issued Granular Spend Controls Reloadable Debit Cards

Most forms of reimbursement don’t allow employers control over where their employees spend their money, but these types of cards with lockout codes offer this assurance.

With reloadable cards with granular spend controls, employers never have to wonder if their employees are misusing corporate expenses or improperly applying perks and stipends. They greatly reduce the need for tedious receipt checking and account matching.

Plus, if you know those funds will only be used for their intended purpose, it builds a certain trust between you and your workforce. For employers, you know the card won’t be misused on purchases outside the purpose of the card. But for employees, it makes them feel entrusted to have the cards, and they get the flexibility to pay for items without a lengthy procurement process.

When employers can safely offer financial rewards to their workers, it opens the door to more benefits like early payroll. This trust and financial benefits can have a positive effect on overall employee retention.

Reloadable & Lockable Cards are the Future for Employers

There’s a reason more and more businesses are using cards with reloadable spend controls. The key benefit of these cards is that employers can use them to pay out expenses with reduced risk. These cards also promote trust, and can pave the way for more benefits for employers and workers alike.

Once you have distributed these cards with spend controls applied, you can breathe a bit easier. Since you know your workers are buying products and services in the areas you have specified, you can focus on other priorities without spending as much time matching transactions to receipts.

Curious if reloadable cards (with or without granular spend controls) would benefit your business? Book a meeting with our team to learn whether our reloadable debit cards are a relevant solution for you!