Ethical dilemma?
 

One of the features of the Diners Club card is the 20% "Le Card" dining discount available at some restaurants. It works in practice like the 20% iDine "Prime" product in that the discount appears on one's credit card statement.

Here's the dilemma (which was discussed at this past weekend's ORD Vodka Do).

If I charge a business lunch at a Le Card establishment, I get a receipt for say $100, but Diners charges me (and I pay) only $80.

How much do I expense? $80, or $100?

IMPORTANT: My company has no "preferred" or corporate credit card program, nor does it pay the $90ish annual fee for my Diners Club card. I charge both personal and business expenses to the card.

I will tally responses.

Mike

Edited to clarify my question. Vodka do.

[This message has been edited by Mikey likes it (edited 05-12-2003).]

Expense the $100 and use the remaining $20 to take some billiard lessons http://www.flyertalk.com/travel/fttr...orum/smile.gif Does your company know about the "discount?" Is it easy for them to find out? I might suggest that you split the difference with them.

I'd prolly expense only the $80. Wouldn't want to lose my job over $20

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Great music!

There is only one thing you can "ethically" do in this case.

Expense the $100. When you get the $20 rebate, inform your employer and state that you'd love to be able to keep it. Do whatever they say. If they say you can keep it...get that in writing.

IMHO.

Bottom line is you can't claim $100 expense for an expense that only cost you $80. Where's the ethical dilemma??

Charging your employer $100 is just as ethical as charging your employer $2200 for a "list price" airfare, while you keep the 90% "discount" for buying a non-refundable ticket two weeks in advance on a flight with the low fare availability.

No, charging the $100 is certainly not ethical! That is clearly stealing $20.

Agreed. Expense the $80.

Sorry guys, as a small business owner, I disagree. (note: for purposes of this discussion, I am using he/him/his as a universal for male and female-explanation so I don't get flammed)

He clearly stated that the company does not pay for his card and expect him to use it for business.

I am fairly sure that he does not steer his guests to iDine establishments, but rather to those that serve the business needs for that particular client.

He is on the hook for the charges should the company be late in reimbursement or become insolvent. Yes, there is a 60 day float, but that sometimes is not enough.

It is probable that the iDine credits do not post until after the expense report is submitted. They may or may not post in reality. Submit the receipt as provided by the restaurant.

Let's not make the submission of an expense account more complicated than it needs to be. That is unless this individual is a government employee, then make the process as convoluted and obtuse as possible.

Looks like the responses are running in favor of expensing the $80.

Here's my thinking on the issue:

I paid (from my own pocket) for a card that has as a feature a 20% discount on dining at certain establishments. If I give my employer the benefit of the 20% savings, I have paid for my employer's benefit.

If the employer paid for my DC, my assessment would be different.

New hypothetical:

Example: I charge a $100 business dinner to my AA Mastercard, earning 100 miles. Those miles go into my account, not my employer's.

My expense report shows a $100 payment I made on behalf of my employer, and for which I expect reimbursement, but does not disclose that I earned miles for the purchase with a value of $xx (assign your own value).

I then proceed to liquidate those miles by "purchasing" free travel or upgrades, which clearly have a cash value suceptible of calculation.

My employer's policy is that frequent flier miles earned by flying belong to the employee, but the policy is silent on the ownership of miles earned from mileage-earning credit cards used for business expenses. (My employer, as in the first hypothetical, does not pay the annual fee on my AA MC).

If your answer to the first hypothetical was that I should expense $80 and not $100, is your response to the new hypothetical that I should expense $100 minus the realized value of the miles earned? If not, why not?

Mike

Could not agree more with the above statement.

If you are fortunate to work for a company that pays you w/in a two week time frame for your expenses, thank the good Lord.

I used to work for a major corp where 45 days was a blessing if I recieved the expense check. If there was a dispute w/the particular expense the whole expense report was held up until resolved. As a result I paid finance charge and late fee $ out of my own pocket.

In my case I clearly had a company that took advantage of me and I would therefore keep the $20.

Mike, if you work for a company who respects you, then I would be honest and take Premex's suggestion. If your company has a screw the employee attitude, take the $ and move onto another job.

Mike,

Interesting question...

In your second example, the meal still cost $100... no doubt about it... you just received something in addition (the miles) as a result.

However, in your first example you are only being charged $80 for the dinner. In essence, a 20% discount. No different than using a 20% off coupon. I would never think of charging my company more than I actually PAID for the meal or service.

So, I would only expense the $80. That is the only way I could live ethically with the decision.

However, the easy solution is to just ask what they expect and desire. They may tell you to expense the full amount as that discount benefit is yours for using your personal card (as are the miles).\

William

As someone who has to approve expenses and educate the staff about what is and is not appropriate at my own place of work...

I would tell folks to expense the $100. The $20 is their benefit, similar to frequent flyer miles or some other kickback from a supplier.

I would tell them that I expect them to disclose the benefits that they are receiving to their supervisor. Why? Because while disclosure isn't a cure-all, having incentives and the like out in the open is helpful to make sure that business decisions are made in the best interest of the company and not the private individual. In other words, don't steer meetings to an iDine (or similar) restaurant. If that's the right place for a meeting, great -- but be careful not to make the decision for personal gain at the expense of the company.

(I know this is a small dollar amount involved, and my usual schpiel refers to much larger things. I have a supplier who regularly hands out pre-paid dinners for 2 at the nicest restaurants in town -- I know this supplier is spending thousands of dollars wooing a handful of employees. But the principal is the same and these things can add up.)

At the same time as the individual can earn this benefit and keep it, I'd expect them not to nickel and dime the company either, or overspend while traveling just because they can. It's a mutual respect thing.

Oh, and our employees can keep their Discover card cashback, too...

Mike, if you save $20 on dining, then the company saves $20. They reimburse you the true costs, $80.

Getting miles is a form of kickback but has been long sanctioned to the point where it is customary, expected, and okay.

Cash kickbacks in any form are not okay, absent the 2% credit card rebate type of thing that is de minimus. But 20% is not de minimus.

Where I work, they say expense the $100. If I use my personal card, whatever benefits are inherent in that card are for my personal use. Even more so since I pay the fee.

The company's remedy is to issue a card in their own name, for which they pay the fee and for which they receive the benefits. In my case, I can not use my personal card for anywhere that the company card is accepted.

Didn't Diners end the Le Card program?