Comments

1. I’d add, does your opinion change if the employer is the government? It shouldn’t, but some people lose their minds when it comes to ‘taxpayer dollars’.

2. In my mind, it’s a fraudulent expense account submission, as the receipt isn’t what you really paid.
   Usually, by signing the report you acknowledge it’s accuracy.

   Don’t see the difference between this and a bogus receipt in this case given the purpose.

3. I think is clearly unethical to pocket double payment, even more so if you pay a higher rate for the room by going through CWT than you would otherwise. That said, I am quite sure plenty of people will do this…

4. @stanis

   It matters to me – government employees get reimbursed for expenses. No expense no reimbursement.

   I’m a government employee – I once attempted to check into a hotel But they wre oversold. They put me in a VERY lousy Ramada and they said there would be no charge like that was supposed to appease me. Well since I paid nothing I got reimbursed nothing.

5. Also, if the rebate happens on the same billing cycle as the original stay, than how have you really paid for it. You pay the net of the two.

   How is this different from using American Express Open to get a 5% discount on the Hyatt Room but billing the full amount?

   It could (and should) be a firing offense in my company.

6. The rules I’ve lived by for 20+ years are these:

   Do something that saves the company money: OK
   Cost the company nothing to do something for myself: OK
   Do something that costs the company money: Not OK – but OK if you fully reimburse promptly
   Do something that puts money in your pocket (miles and points excluded): NOT OK AT ALL

   I’ve seen people fired for doing things like expensing a business ticket, refunding it; flying on a mileage ticket – and pocketing the ticket refund amount. NOT OK.

   You may have a ‘moral’ ground to stand on since the Prestige card is yours – but it breaks the money in your pocket rule – I’ll pass. Most companies take a dim view of expense manipulation.

7. My annual fee expense, my profit. Not only is it ok for me, but if I’m spending 4 nights away from my family and my 8 month old son, I want something to show for it. I’m not passing the savings to a large company that doesn’t “need” them. I’m not spending time away from my family so that they are the ones saving the money. End of story.

8. Not ethical. Not even borderline.

9. I’d add an exception to the “money in your pocket” rule Mike said, and that’s that I personally am fine with shopping through a cashback portal for something I need to purchase with my company (for me, that typically only means hotels). It literally costs the company nothing because I find the cheapest rate first, and I’m putting it on the company card (so they’re earning points, not me). If I didn’t book it, the alternative is using our travel agent, which of course costs money, and I can always do as well or better than they can.

10. I don’t quite get the comments in this thread:

    How is this reimbursement ANY different then getting AmEx points or 2% cash back or eve 5% cash back on a Hyatt stay with an Amex Biz card? You are not getting a reduction on the room rate, you are getting cashback on a CC.

    The benefit is a credit card park, not a discount on the room. The only gray area I see is if you are intentionally spending MORE to book a room through CWT to get the money back, but having the reimbursement rate for hotel rooms caped prevents this.

11. I should add, if my hypothetical employer would like to “profit” with the arrangement between Citi and myself, then he should provide me with a Citi Premier card, pay the annual fee, and instruct me to book through their portal.

12. I don’t think it’s a problem unless the reimbursement is more than the cheapest your company would’ve been able to get the room for using other avenues…

13. I think most people wouldn’t think twice about using their 1% or 2% cash back card for business expenses. I’ve done it, and if I had employees, I’d have no problem with them doing it (as long as they aren’t incurring extra charges just to run up the rebate, of course).

    This just seems to be taking that to an extreme, really it’s a 25% cash back, if the hotel rate stays steady. Looked at that way, it *ought* to be okay. But somehow, it doesn’t feel right, and I’m not sure why.

    On a more practical note, and since the post touches on taxes – I sometimes travel for business where I am not reimbursed. I deduct travel expenses on my schedule C. What would the *IRS* think if I used this card to pay for 4 nights of business travel, included the 4 nights as a deduction, and then was rebated for the 4th night?

14. How is this any different from taking advantage of promotions that earn you a free night?

15. This also “just feels wrong” to me at some level, but in essence all FF programs paying out in miles and points are exactly this scenario.

    This card effectively offers a 25% rebate; a Chase UR card that gives 3 points back on hotels is offering at least a 3% rebate (arguably more depending on how you value the points). No one would argue that a business-traveler should subtract at least the minimal valuation of the earned points from their expense report, would they? So, a 3-6% rebate is okay but a 25% rebate means you deserve to get fired?

    What’s the difference? Because with Chase UR you have to go online and say “Chase, write me a check for these UR points?”

16. to swag:

    Cash rebates are considered taxable income, weather they be 2%, 5%, or 90%. Points rebates are not taxable, for now, but who knows what will happen in the future..

17. The difference is most corporations explicitly allow folks to keep points/miles.

    I wouldn’t use a cashback card on corporate travels.

18. @jack cash rebates aren’t taxable income. however if you get a tax free reimbursement and take a rebate then it would become taxable i believe.

19. My feeling is that it’s fine – provided (like others said) that you’re not booking a room that you wouldn’t normally book for travel (like a suite). I paid the annual fee for the credit card, why should my employer benefit from that? Up to the point (at least) where the cost of the annual fee is recouped, I feel that it’s certainly fair game.
    Same goes for bag fees – this past year, I only traveled about 10K miles for business – the other 15k was personal travel paid for out of my pocket, and the last 2K was specifically a mileage run to hit the threshold. So, I get a free checked bag, but I spent my own time and money to get that perk – why shouldn’t I get back $25/bag/flight from my employer? Now, in the past when I’ve flown 25-50k/yr exclusively for business, I haven’t added on a bag fee to my invoice.

20. I don’t see a problem doing this. The fourth night is a benefit that I pay for — with a credit pull, limiting opportunities with Citi (8/65 rule etc.), annual fee, and so on. I should be able to reap the reward.

    Here is another example: what if I buy a ticket for a work trip and it costs $300. The employer reimburses me $300. Then Citi Prestige reimburses $250 of the cost. Unethical? Again, I don’t think so.

    I have used the Amex Plat benefit to buy gift cards, which are reimbursed by Amex. I use those gift cards to pay for work travel, which is reimbursed by the employer. On the one hand this is double dipping but on the other hand if I didn’t use the GC on a work trip I could use it on a personal trip so I’m still losing out by using it on a work trip.

    This is no different from using a rewards credit card. You pay for a fringe benefit and you get it.

21. Some bored federal prosecutor is going to read this and start combing through government expense reports

22. It’s not ethical. To those tripping over themselves trying to justify it, explain what you are doing to your employer or client and then ask them to approve it.

23. Wow people. If it makes you feel better, why not voluntarily transfer all the frequent flier miles you earn for business travel back to your company as well. It would be ‘dishonest’ to keep them for your own personal use, non? Better option: just have an open conversation with your company. If you aren’t working for the devil, chances are the outcome will be win-win. BTW, completely agree with comments about paying the annual fee…..but I’d take it a step further: If your company policy requires you to incur a debt on your own credit card on behalf of the company, this means that you are extending your company an interest free loan. Question: is it morally correct for a company to place a salaried employee in that position? Now let’s talk about ethics.

24. I just got back from a paid government expensed trip and I used my AmEx Everyday card and got $30 back by using the card at a Hilton Garden Inn. There are really two issues, I should have been using my gov’t credit card and not my personal and should I have taken the credit. I never use my gov’t credit card at hotels on business trip and no one has ever said anything to me. I do use my gov’t card for flight purchases because they are frequently changed and booked in advance and I don’t like that much money on my personal cards where I might not get reimbursed for weeks.

    If I had a free bag privilege I would not expense that cost.

25. One thing some of you are forgetting is that you pay for the 4th night. Then you wait a couple billing cycles and then hopefully you get the credit. Would you not expense that night in hopes of getting reimbursed a few months down the road? I’d expense it for sure, and any credit I got would be the result of my signing up for a high AF card.

26. @Dorn,

    Explain to the client i’m using a cash back credit card? He’d just give me a blank look and ask why I was bothering him about this.

27. My company does not allow you pay airfare or hotels with other card than the corporate one. If you pay with your personal one you are out of luck in getting reimbursed. Easy and clear rule.

28. My opinion…if it doesn’t increase the cost you are being reimbursed then its OK. I served in the US Army for over 20 years and the policy for awhile was that any airline miles earned while on government travel had to be provided to the government. They paid for it, they were entitled to it. I didn’t like it, but it was logically consistent. That policy has changed now.

    In my opinion, if you make a decision that benefits you but adds a cost, then it is not right. If you choose to stay at a Hilton instead of a Marriott (because you want Hilton points) and it costs more, that is ethically questionable. If you choose a flight that arrives later because it is on American rather than Delta (because you want American points) and you are more tired the next day or have less time at the office that day, is that OK? Even if the cost is the same? Questionable.

    If you follow the argument that any benefit you get back (fourth night free) should be reduced from your expense reimbursement, then you should reduce the bill by the calculated values of airline and hotel points you earned (and the value of that free week-end car rental you qualified for). It can get absurd. Again, my opinion is that if it costs the one paying the bill nothing more, than it is OK. If that bothers you then book he hotel yourself at the same rate and you can feel ethically superior by not getting the fourth night reimbursed.

29. @Dom to which I would say fine, I will use a different card and no one benefits, you are just making your employees unhappy.

30. Yeah that’s fraud.

31. I don’t see an issue with this and I’d never terminate an employee for this either.

    If you do you you’ll run the slope of $100 Citi AA credits, to Amex Offers for spending more than X at Y hotel chain, to 5x UR points at OD or OM redeemable for premium class travel at an effective 10-30% cash back being considered unethical.

    As a manager I don’t have time to deal with, or want to figure out what paperwork I could possibly need to process one of my employees wanting to return their Amex Offer Hampton Inn credit for spending more than $150. It’d take 8 hours dealing with accounting and payroll to figure out how to process expense reports that don’t match reciepts, what it should be taxed at, how to process the reimbursement since the employee has to wait for Citi to hopefully reimburse. They’d save the company time by keeping their mouth shut.

    If an employee can figure out they can get a 25% cash back credit card on four night stays, more power to them.

32. The company is probably not paying the employee or contractor anything for all the hours away from home actually traveling. (How ethical is that?) If the employee can get any benefit from his own (fee paid) credit card and it costs the company nothing, he should by all means get some benefit. By the way, if he charges company expenses to himself, he is making the company an interest free loan.

33. I usually have black or white opinions on ethics. But this one, I’m thinking is ethical, but I’m not sure. You are not expensing anything more than the cost of your hotel stay. The extra night belongs to you because it’s your card, you pay the annual fee, and you get the bonus. You’re the one who arrives at midnight and shows up at your meeting at 9am.

    If you receive a voucher from an airline because of a cancelled flight, do you turn that voucher over to your company? The airline got you to your destination (eventually) using the company-paid tix. You are the one who was inconvenienced by the wait for another flight. So, you use the voucher for a vacation. I will be watching this discussion, it’s a most interesting one.

34. The (extremely large) company I work for has an explicit policy that permits employees to keep loyalty program benefits for themselves. This includes the rewards program tied to the company cards; participation in that program is optional and has a yearly fee (the card itself does not). In return they must abide by highly specific booking policies; failure to do so requires approval from high-level management, at a level that most employees *don’t* want to rise to for that reason. Employees can use personal cards if booking through the approved channels, if they choose to (company cards are issued to employees and they are responsible for paying the balances, rather than being billed directly to company). If they use benefits like the 4th night free, it must be disclosed to clients.

    This works for us, though I think many companies would not accept the tradeoffs.

35. I reimburse my employees “reasonable and actual” expenses.

    Conflicts of interest are to be avoided, and “build a fence” around it.

    Pocketing a fourth night reimbursement would be grounds for immediate divorce.

    And I would (and do) reimburse employees for their credit card annual fees.

    —Trophy Boss

36. I don’t think this one is close. No way. There are a lot of ways to rationalize this stuff, but I try to turn pretty straight corners. When topcashback used to give cashback for Hyatt stays, I would reduce my expense report by the amount I got reimbursed. I thought that was a no-brainer. A slightly more difficult one — sometimes I pay the difference between the Hyatt double points rate and the lower rate in order to get the extra points. And an ethical question arises about what to use as the rate. For me, it’s easy — it’s the rate I would have paid. I could use the standard rate, but the reality is that I am a triple A member and although my employer probably doesn’t have the right to expect me to use my AAA membership to get good rates when I travel on business travel, the reality is that I do have that membership and it is the rate I book. I could rationalize here and say, “but they have no right to expect me to use AAA and I pay my AAA membership,” but the reality is that I would be an AAA member regardless, and this is a pure rationalization to justify what (in my opinion) is stealing from my employers.

    My company lets me keep my frequent flier miles. But another gray area is when you book a room because you have status or like the points even though it’s not the cheapest comparable rate in town. Again, this is a place where my employer asks us to use discretion and gives us some latitude, and so I try to not to abuse that trust.

    If the only reason you have the citi prestige is to save your employers the fourth night benefit, I could see having a conversation where you ask for some portion of the annual fee refunded, but submitting a report that says you spent $1600 instead of $1200 is just plain wrong to me. To each his own. I couldn’t explain it to my mother with a straight face.

37. Yawn. Save these types of conversations and fingerpointing for milepoint and FlyerTalk. Some are going to do these types of shanigans and some won’t. Don’t be surprised and hurt if you get yourself sacked if you’re caught. It’s that simple.

38. This should be easily resolved on a case b y case basis. Just ask the HR department in the company you work for whether or not it is OK. They can resolve the ethics for you. But I bet few would ever want their employer know what they are doing if they are pocketing it.
    If you don’t want your employer to know, I think the ethics question answers itself.

39. @Larry. You are OK with charging your company more to stay at a hotel you prefer (and you keep the points) but not OK with charging the company the same amount (and pocketing the refund you get a month or two later). If they give you the latitude to use your discretion and you use it to charge them more so you can benefit, how is that different than charging them the same amount so you can benefit? You do understand that the room refund takes a month or two to process, so it is not as though you are only paying for three nights at that time and, of course, there is a annual fee to be able to do this.
    In my case, I find the best rate I can, using all the tricks I have and then ask for the rate that I can get through the Prestige card. If their rate is as good, I’m OK with it. Ethics are a very personal thing and differ by situation (and over the course of your life) and it is easy to get hypothetical. The real world is much grayer and fuzzier. The best advice…if it bothers you, don’t do it.

40. Interesting discussion. I’m a sole proprietor and I bill my clients for travel expenses. If I keep an arsenal of airline cards to offset baggage fees, charging the client for bag fees I don’t actually pay would help me offset the AFs. Not charging means I’m helping finance travel by paying AFs in order to save my clients money. It’s something I’ve been thinking about morally myself and have wondered how others handle this moral confusion. How about an upgrade using points and miles. I pay $350 plus 25,000 miles but my client now pays for two less checked bags. And yes, I have to check lots of bags. I feel in that instance that I could bill for the two bags to help offset the upgrade fee since I’d never bill for an upgrade.

41. A most excellent suggestion, Faithiss. The logistics of submitting an expense report for a 3 night stay today and putting in a “credit” a month later would be ridiculous.

42. I would just use a credit card which doesn’t offer this benefit for work travel. I don’t care to deal with crediting back expenses to work but it’s definitely debatable whether it’s ethical to keep the fourth night credit.

43. @Dom – I agree with you. When in doubt – DISCLOSE. Some companies may not care that you receive a benefit so long as you can show that your use of CWT does not cost them more.

    Other companies – will flat out say no and get very unhappy with you and think you are putting one over them – especially if they find out some other way than you disclosing it to them.

    As an aside – I head up Internal Audit for a large company and I do expense report reviews. I would be perturbed to see someone using this benefit without disclosing it. Don’t think that Internal Audit doesn’t know that the Citi Prestige card has a 4th night free benefit as I have it and use it personally. Not all Internal Auditors live in a bubble (contrary to popular belief:-)

    My company has a policy that I can only use my Corporate card for business expenses, so non-corporate card use is scrutinized closely.

44. @liam Liam has the best answer – have an open dialog with the company and maybe there is a win-win solution. On occasions I have stayed with a friend or relative while on business travel, saving the company the cost of the hotel. The company’s answer was this: be sure to take the host person or family out to a really nice dinner and expense that to the company.

    However, this is not so much a “ethics” questions as a “rules” question and you need to ask what the company rule is.

45. The Prestige benefit is between the cardholder and the bank. It’s not in scope when looking at employee reimbursement.

    If someone got 2% cash back should they be deducting 2% off expenses? No.

46. Matt articulated it … if you stay in a hotel 3 nights, you submit 3 nights hotel costs, stay 5 nights, submit 5 nights hotel costs. Your card receives a rebate. The rebate has nothing to do with the cost of the hotel for the nights you occupied the room.

    There would be nothing negative about asking your company … what would they want you to do, put in the credit on your next month’s expenses? A logistical nightmare, nobody would want that. Use a different card so you don’t get the rebate? That’s not fair to you.

47. I don’t see how this is any more unethical than earning points and miles for your stays and flights, especially if you’re paying with an hotel/airline cobranded credit card that gives you bonus points/miles for booking stays/tickets with that card. Because the rebate comes in the form of a pseudo currency versus real money? I think that’s a pretty flimsy distinction.

48. I think that it would be very clear that if a company has you using your personal cards for business expenses, that any benefit you get because you: A) took the time to research and find the best card, b) suffered a hard pull on your credit, and c) extended them an interest free loan, should belong to you. It would become a nightmare trying to sort out what is ok to keep, and what discounts to pass on to the business. If the business wants the benefits, then they should open a corporate card that their employees put their expenses on. As an example, Amex recently had an offer for Smart and Final where you spend $50 and get a $25 statement credit. If you worked for a business that sent you to pick up supplies, and you charged $50 on your Amex, would you only bill your business $25 since you are eventually going to get a $25 statement credit? What if you buy supplies at office stores with your ink? Do you give the business a 5% discount since you will get 5x UR points? But wait, some might argue that UR points value at closer to .02 cents each, so do you give them a 10% discount since at some point down the line you might be able to use those points to book yourself a vacation and get .02 value for them? But what if before you book your vacation, UR points suddenly devalue and are only worth closer to .01, then do you go back and re-bill the business for the difference for the credit that you originally gave them? This could lead to some very confusing book keeping. I would be curious to know if the people that say it is unethical, would feel differently if it was a free night certificate. If you stayed 3 nights and received a free night certificate, would you have any problem keeping it and using it for personal travel?

49. Some of the rationalizations here are . . . Surprising.

    I wonder what the IRS would say here. Taking reimbusement for an amount your employer has paid and presumably taken a deduction for strikes me as almost certainly income. In other words if you take $1600 from an employer for an actual incurred expense of $1200, I think you’ve plainly recognized $400 in income.

50. The ethics of participating in any loyalty program (airline, hotel, rental car) or rebate program (credit cards, shopping portals) are questionable. These programs are specifically designed to get travelers to choose one brand over another, sometimes at a higher price. Anybody who has taken an extra connection on a business trip to get more miles or paid a higher ticket price on their preferred airline is putting themselves ahead of their business’ interests. You may internally justify it by saying your elite status gets free bags and justifies the higher fare, or that a first class upgrade will get you to your meeting better rested, but the bottom line is that you are steering your business’ money away from the cheapest option.

    Having said that, I think businesses allow these kinds of things as a fringe benefit to employees and they know that a happy employee is worth the few percentage points of extra costs (if any) that may be incurred. Whatever games the employees want to play to get a personal rebate are tolerated. Whether the rebate is 2%, 5%, 10% 25% or 50% shouldn’t matter to the company unless they have a specific policy that forbids it. Ethically it is all questionable, but it all conforms to the norms of behavior of today’s business traveler.