You can minimize risk and unauthorized purchases with your fuel card program by focusing on four key areas: Your driver fueling policy, controls, fraud alerts, and monitoring. To ensure that you're taking the right steps to optimize your program, P-Fleet has created this ultimate guide which applies to most types of fuel cards.
Step 1: Draft a Driver Fuel Card Policy
A best practice for companies that utilize a fuel card program is to have employees sign a driver fueling policy. The policy should clearly state your expectations for how drivers use the cards. Simple, right? Well, because many companies are unsure what to include, they skip the policy altogether. Let’s fix that with some quick tips for drafting a policy.
Start with an explanation.
It might seem obvious, but provide a brief explanation at the beginning so that drivers know what they are signing. Specify that the driver is being issued a card and PIN from your fuel card program. State how the document outlines the permitted use of that card and verifies the driver’s understanding of your company's fueling policy.
Outline the terms.
A good rule of thumb for outlining the terms is to cover who, what, when, where, why and how:
- Who is allowed to use the card? Specify who is authorized to make a purchase, and state that the card is not to be used by other drivers or for personal use.
- What purchases are allowed? Indicate what types of purchases comply with your policy. If the card is restricted to fuel, indicate that and include the type allowed (e.g., diesel only, diesel and regular unleaded, etc.).
- When can the card be used? Specify if drivers should fuel at the start or end of their shift and during which hours and days fueling is authorized.
- Where can the card be used? Specify which fuel locations or brands are allowed.
- Why must a driver adhere to the policy? Make it clear that if the driver does not follow the policy, he or she will face disciplinary actions that could include revoking use of the card, repayment of fraudulent purchases and/or termination of employment.
- How should a purchase be made? Provide instructions if certain steps should be followed at the time of fueling such as entering the vehicle number or odometer. Indicate if drivers need to manually log any transaction information as well.
Add acceptance statements.
Now that you’ve outlined the terms of the policy, rewrite them as acceptance statements. Use first person so that it’s intuitive for the driver as he or she reads the document. For example, “I understand that I have been issued a card which is to be used only by me for fueling company vehicles, not for personal use.”
End with a signature.
Include language that by signing the document, the driver agrees to the acceptance statements. Allow space for the driver to print and sign his or her name. Then file your paperwork so you can easily find it whenever you need it.
Step 2: Establish fuel card purchase controls.
To help minimize unauthorized fuel purchases and other types of fraud, most vendors offer purchase controls to restrict a card’s ability to purchase fuel. Setting restrictions that are right for the drivers and vehicles that make up your fleet can be a balancing act. If controls are too restrictive, your drivers may not be able to buy the fuel they need. If they are too lax, then the company is vulnerable to fraud. So, how can you determine which purchase controls are ideal for your business?
Know which purchase controls are available.
To find the controls that are best for your business, it is important to first understand the array of available options. Most services have the following restrictions available:
- Gallons or dollars per transaction
- Gallons or dollars per day, week, or month
- Transaction per day
- Authorized fueling times and days
- Fuel only or fuel and maintenance
- Driver PINs or Driver IDs
While not widely available, some fuel card programs (like OTR and CFN cards) can restrict the fuel or product type that cards can purchase. Product type restrictions are not only valuable for their ability to prevent fraud, but also prevent drivers from inadvertently putting the wrong type of fuel into vehicles or equipment, which can cause maintenance issues or even engine failure.
Set up PINs and driver IDs.
When drivers use their card, they will first be asked to enter a PIN or driver ID. This 4-6 digit code verifies the driver’s identity and helps to ensure that only your authorized employees use your card.
While they are quite similar, there is a critical difference in card setup that distinguishes PINs from driver IDs. PINs are used with driver cards, while driver IDs are used with vehicle cards. Driver cards work with one and only one PIN, while vehicle cards draw from a pool of driver IDs. By using driver IDs, vehicle cards allow you track both the vehicle and driver for every transaction, information that could be critical if abuse occurs.
When you set up your PINs or Driver IDs, you want them to be easy to remember, but not easy to guess. So, while the PIN 1234 may be the easiest code for a driver to remember, it is also one of the first codes someone that is not authorized to use the card would guess. On the other hand, a series of random numbers may be the hardest code for someone to guess, but would be difficult for a driver to remember.
A solution to this problem is to use numbers that hold meaning to that driver, and that driver alone. This could be the last 4 digits of the social security number, or a designated employee ID number. Regardless of the number you choose, it is important that the code is not shared with others and is never written on the card. This number is the first line of defense between you and fraudulent use and should be kept secure.
Customize fuel card controls by driver and/or vehicle.
Once you understand the restrictions available to you, you can start applying these restrictions to your cards. If all your drivers and/or vehicles have similar needs, then it is ok to create one card restriction template and use it for all your cards.
However, if needs will vary based on your drivers' roles and responsibilities, it is highly recommended that you customize your purchase controls so that they match the individual needs. A pickup doesn’t need as much fuel as a box truck, which doesn’t require as much fuel as a semi. Card controls are fully customizable, so only give drivers access to as much fuel as their vehicles require.
Avoid overly strict card limits.
You might think setting the strictest limits possible would be ideal for reducing company fuel card abuse and fraud. While they might be best for stopping fraud, overly strict limits can also stop your drivers from quickly refueling when they need to.
In these cases, an authorized company employee would need to contact your vendor and approve changes to limits before any purchases can be made. This issue can be mitigated through the effective use of online tools, but, depending on the circumstances, overly strict card restrictions can still delay drivers significantly as they try to contact their managers for approval.
Drivers that are unable to purchase fuel because of overly strict purchase controls might have to use alternative forms of payment, like cash or a personal credit card, to avoid delays. This prevents your company from collecting transaction data, leading to problems with reports. It also exposes the company to risk, as it bypasses your cards’ ability to restrict unauthorized purchases.
Don’t set limits too high.
With the problems that can arise from overly restrictive controls, it might seem better to set card limits far above a driver’s or vehicle’s expected fuel usage to prevent unnecessary delays. However, overly lax restrictions are just as bad (and often worse) than overly strict limits.
When card controls are set to too high, unauthorized purchases cannot be effectively prevented. Furthermore, if fraud occurs, these unauthorized transactions can continue unnoticed for an extended period, allowing purchase totals to add up to large sums before they can be stopped.
Set purchase controls that are right for your fuel card program.
To use the controls effectively set the limits that match your company’s needs as closely as possible. To do this ask yourself this series of questions so that you can properly frame the expected usage around your available controls.
- What type of vehicle or equipment will the card be used for?
- How much fuel do you expect this vehicle or equipment to use?
- When will drivers need to use their cards?
What type of vehicle or equipment will the card be used for?
First, consider the type of vehicle or equipment that a card will be used for. If you have fuel type or product restrictions available, only include the products that each vehicle or piece of equipment uses. Dollars or gallons per transaction limits should be set to accommodate the entire fuel tank so that drivers are capped at the maximum amount of fuel they could use at one time.
If you opt to use driver cards, consider all of the vehicles and pieces of equipment that a card will be used for. Make sure to set your restrictions so that they accommodate the largest piece of equipment.
How much fuel do you expect this vehicle or equipment to use?
Next, consider how much fuel each vehicle or piece of equipment is uses. Large trucks driving long distances likely need high daily, weekly, and/or monthly limits. Smaller vehicles that travel locally should have significantly lower daily, weekly, and/or monthly limits. Be sure to include reefer units or other equipment that needs fuel when you calculate a card’s expected fuel spend.
Also consider how many transactions per day a vehicle and/or piece of equipment requires. If you use driver cards, think about how often drivers need to fuel the vehicles and equipment they are responsible for. It is best to allow cards one extra transaction above this number per day. This is because denials can count against a card’s daily transaction limit. If there is no buffer to accommodate this, there can be issues when a driver tries to use their final daily transaction.
When will drivers need to use their cards?
Finally, consider when drivers will need access to their card. While it is not always the case, time and day restrictions should usually match company hours. This helps prevent employees from using company fuel cards for personal vehicles.
Change your fuel card limits.
When you first set your purchase controls you may have anticipated your usage to be higher or lower than what your fleet uses. In either case, you can adjust your card controls so that they better match your fleet’s needs. You should also adjust your card restrictions if the fueling needs of your fleet changes so that drivers can always get the fuel the need and you are always protected against fraud.
Adjustments can be temporary, or permanent and should be regularly reviewed to ensure they accurately reflect your fleet’s needs. Some vendors offer online tools that allow you to view and adjust your cards’ restrictions at any time, making this process quick and easy.
Step 3: Create alerts to assist fleet managers.
Email alerts are one of the best tools to control driver fueling and protect you from other fraud. For many managers, this is still the primary purpose for putting alerts in place; they’re an extension of card purchase controls. However, there are other uses to consider when deciding which fuel alerts should be enacted as part of your company’s fleet fueling program
Detect irregular fueling.
Most fuel card programs offer robust and customizable purchase controls to help prevent abuse and theft. But restrictions are designed to, well, restrict. And, you might decide that certain instances warrant less restrictive card limits to avoid disruptions to operations. For example, drivers might not normally need to fuel after hours or on weekends, but the occasional situation could arise that demands that flexibility. Overly restrictive limits could cause delays, so it's the perfect place to implement alerts instead of restrictions. Your program can be set up to allow drivers to fuel while alerts are sent to managers, notifying them of any transaction that occurs outside of normal business hours.
Alerts act as an early warning system by notifying managers of any irregular fueling. Rather than waiting for an exception report at the end of the week or month, managers can follow up with drivers immediately to confirm if fueling was legitimate and take corrective action if not. There are many types of alerts to detect suspect fueling activity, including time-based (e.g., nights and weekends), product related (e.g., unleaded, mid-grade, premium) and location-based. These should be set up in accordance with your fueling policy so that you are notified of any deviations in fueling behavior.
Decrease operational expenses.
Setting alerts to detect abnormal fueling isn’t just about preventing theft. Your policy reflects an overall fueling strategy – where, when and how much to fuel – and alerts identify noncompliance. By correcting noncompliance, companies can keep fuel costs down and streamline their operations.
Consider location-based alerts, for example. Suppose your company and fuel provider have identified the locations with the lowest prices within an area. You instruct drivers to fuel only at those designated sites to maximize savings. Location alerts can be set up to trigger whenever a driver fuels outside of those locations. Their managers can then follow up to clarify the policy with the driver in question.
With some cards, it might not be the location, but the type of site that is the cause for concern. P-Fleet’s Fleetwide cards are accepted at both retail gas stations and CFN locations. Fleet managers often prefer that drivers fuel at CFN locations whenever possible to leverage available discounts. Alerts can be enacted to show if drivers fuel at a retail site rather than a CFN site so managers can stress the importance of fueling at discounted sites.
Location-based alerts are also useful for companies that use on-site fuel tanks in addition to off-site fuel cards. Because companies want to leverage the cost advantage of on-site fuel, they’ll want to ensure that drivers fuel there whenever possible. Alerts can be created to notify managers when cards are used off-site and within close proximity to a company’s on-site fueling facility.
In addition to location-based alerts, managers may want alerts related to product type. Unleaded transactions can be flagged if diesel was supposed to be used or vice versa. If drivers purchase mid-grade or premium instead of regular unleaded, alerts can be triggered. By utilizing alerts to quickly address issues, companies can minimize fuel expenses.
Improve fleet analytics.
One of the most important fuel card benefits is their ability to capture level III data, including card number, driver, vehicle, gallons, fuel type, odometer and more. That data is useful for fleet analytics that are made possible through the use of insightful fuel reports. In order for this information to be accurate, managers will need to verify that data, like the odometer reading or job number, is entered correctly by drivers at the time of fueling.
Electronic receipts (e-receipts) are a type of alert that can support those efforts. E-receipts can be sent via email whenever a card is used. They contain transaction details and can be set up for select cards or your entire account. They allow managers to quickly review transactions so that company fleet reports are as accurate as possible. E-receipts can even be used by companies to expedite billing their own customers for fuel used during a job.
Step 4: Monitor your drivers.
Fuel card programs are designed to limit unauthorized purchases. However, to effectively control spend, managers are important part of the process. Fuel card companies provide tools to protect your business, including easy to use online portals that let you monitor charges and quickly spot irregular fueling. If red flags pop up, you can adjust card limits or cancel them altogether – immediately, from anywhere.
Access your fueling information online.
Information is critical to reducing unauthorized use of cards. Managers need to be able to access account information online anytime, anywhere. Waiting for invoices to be published online or mailed to you is not sufficient. Instead, transactions should be available online as quickly as possible, allowing managers to monitor card activity in real time.
Management oversight of your fuel card program is your front line of defense against unauthorized purchases. Whoever in your company best understands driver responsibilities should review transactions periodically to ensure activity is legitimate.
For some, this may be a task best suited for a parent company or corporate headquarters. In that case, corporate managers are responsible for detecting fraud and inefficiencies by comparing divisions, departments and drivers within the company. If a department or driver operates significantly less efficiently than another, it may indicate fraud or misuse, and further follow-up is needed.
In other companies, local managers provide will better oversight because they are more intimately aware of the daily roles and responsibilities of their employees. This knowledge enables them to confirm drivers are fueling the correct vehicle where and when they should. In contrast, a corporate employee may lack this detailed information and fail to notice suspicious activity when it first arises.
Alternatively, you may find that a blend of corporate and regional oversight is best for your business. Regional managers can review the fueling details of drivers that report to them, while corporate managers look at the bigger picture of your company’s fuel spend. This dual oversight approach is often the most effective means of reducing unauthorized purchases and preventing fraud.
Track Every Gallon of Fuel
It is important to capture driver information for each transaction so managers can hold individuals accountable for non-compliant activity. You can either assign drivers their own card or assign them a unique driver ID when using vehicle cards. This driver ID ties each transaction to a driver. If there are ever suspicious purchases, then you will know who is responsible and can follow-up with the employee to determine what went wrong.
Using this information, you can generate reports to easily compile and compare driver fuel spend. These reports give managers insight into their fleet’s activity and can set usage standards. After standards are set, it should be relatively easy to identify outliers and set up a meeting to review your fueling policies.
Fuel card reports that use summary data for comparison are easiest for identifying outliers. These include MPG reports, weekly/monthly gallon reports and weekly/monthly fuel spend reports. These reports are effective because they provide a bird's eye view of activity over long periods of time. If there is anything out of the ordinary on these summary reports, it’s a good idea to closely monitor driver activity to determine why they are out of line.
MPG reports are an excellent example of monitoring in action. They use the odometer entries and gallons pumped for each transaction to calculate the MPG between fill-ups for each vehicle. The average MPG should remain fairly constant for each vehicle. Managers can compare vehicle MPGs over longer periods of time and drill down on vehicles that perform below the norm. Or, they can look for individual transactions that have significantly lower MPG values. If the MPG for a transaction is significantly below average, it can be a sign that fuel was put into another vehicle. Since the driver is associated with the transaction, managers can quickly address the problem.
Quick notifications alert you to irregular fueling.
In addition to checking reports online, it can be useful to set up email alerts. Alerts act as an early warning system when irregular fueling occurs. They can be time-based (e.g. nights and weekends), product-based (e.g. unleaded, mid-grade, or premium) or location-based (e.g. out of state). Ideally, alerts should be set up to identify transactions that do not meet your fueling policy.
You can also opt to receive an alert for every transaction. These are known as e-receipts and can apply to an entire fleet, individual drivers, or specific cards. If it is burdensome to receive e-receipts for your entire fleet, you might opt to only setup individuals who need close monitoring. These may be new hires in a probationary period, drivers with past problems, or those who were flagged as outliers on reports.
Use online tools to review and adjust limits as necessary.
Beyond driver monitoring, vendors’ online tools allow you to view and adjust card limits. Purchase controls let you restrict cards based on several criteria, including, fuel type, time of day, gallons/dollars per transaction, day, week, or month, etc. You should review these limits periodically to ensure everything is set up correctly.
Reviewing limits online allows managers to fine-tune their programs. Managers can ensure drivers aren’t having issues fueling due to overly restrictive limits. They can also make limits more stringent where necessary to help prevent unauthorized purchases. If unauthorized transactions or fraud occurs, it is critical to have online access to the account to invalidate the suspicious card immediately.
These guidelines will help you secure your fuel card program by minimizing unauthorized purchases, reducing the time necessary to monitor your program, and ensuring that drivers are following your policies. If you need assistance, our team at P-Fleet can guide you through the process and confirm that you are following our fuel card best practices.