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Paying With Credit Cards - And Making Money

Pierce County Library System, WA

Innovation Summary

Several years ago PCLS implemented credit cards paying back 1% to 2% on every dollar charged. To maximize the rebate amount, we changed our processes. In 2012 the Library purchased over $2.3 million in goods and services using credit cards and received over $26,000 in cash rebates.

Problem Statement

Why not make money and save money while spending money? That was the principle question Pierce County Library System asked in 2011. Returns on investing available cash continue to be at an all-time low, thus PCLS sought to try the opposite. PCLS’s Finance Department employs a standard purchasing process that included purchase orders, credit cards, and reimbursements. PCLS had already noted that less paperwork was generated by using credit cards and, therefore, savings were realized by changing how we purchased routine items. PCLS was eligible for credit card cash-back programs but the challenge was encouraging the maximum use of credit cards for as many purchases as possible—small and large—without incurring new fees or adding to existing workloads of purchasers and Finance Department staff. In addition, as part of the program, PCLS was required to, and could achieve, paying all balances within thirty days of the credit card statement date.


The most important element was to have managers or purchasers ask or require credit cards be accepted as payments made to companies of any kind. This included routine purchases of equipment and supplies, attorneys and consultants, large telecommunication and utility companies, and major capital acquisitions. No charge was too small or too big. The first integral step was to ask our vendors whether PCLS could pay bills with a credit card. The second key element was to shift the Finance Department from a purchase-order process to a credit card process. Specific tasks and job duties had to be shifted and new job duties had to be assigned. With the surge in credit card use, new controls had to be implemented and the process had to be fast and efficient, and pass the scrutiny of the state auditors. The third key element was to instill a sense of responsibility into credit card users with their extremely high credit limits—in some cases up to $500,000 for technology purchases.


Pierce County Library System’s Finance Department transitioned successfully from the primary paper-based purchase order system to a statement-based payment system. Further refinements were made in the purchase-payment lifecycle to ensure payments made to the credit card company occurred promptly to maximize return. One interesting outcome achieved is credit card cash-back revenue has offset historic low investment returns from available funds. In 2012 PCLS invested nearly $12 million of available funds throughout the year and realized just under $10,400 in returns (the Library invests in the County investment pool). This compared to $26,000 cash-backs from using credit cards completes the irony that every dollar spent using credit cards on necessary purchases earned thirteen times more money than a dollar invested. Lessons Learned: Due to the nuances of government-issued credit cards and authorizations occurring through financial institutions, there can be problems when purchasers go to stores to make purchases and are denied. Besides the embarrassment and frustration when a transaction is declined, finance staff must get involved with resolving issues with the credit card company (for example, a miscoded product at the store or going over credit limit). This meant finance staff had to be available, trained, and ready to make online changes to the corporate credit card accounts, and purchasers became more prepared prior to using credit cards. To increase usage of credit cards, wherever plausible the Finance Manager checks with payees to take credit card payments. Request for proposals, contracts, and agreements were negotiated to accept credit card payments.