Our debit card agreements for business customers clearly state that the card is to be used for business purposes only but we frequently see activity that is pretty obviously for personal purposes (purchases in supermarkets, liquor stores, casinos, etc.). Is this something that we should be concerned about when we spot it? If so, what do others do? Thanks for any advice.

I see the same type of activity, but unless it is excessive, I assume it is business related. A business can be having a party for its customers, a luncheon for its staff (I once worked in a company that ordered breakfast in for staff three times a week). Your customer could have taken a customer out for dinner at a local casino.

Generally I would include this type of activity in a SAR (comingling of funds/tax evasion) if I was filing a SAR for another reason. I have never filed a SAR just for the miss-use of a debit card.

Thanks BC, that is how we have been treating these (even though it annoys me greatly).

I used to get annoyed when monitoring on Farm LOCs, and the memo line said "FEED". Check would be to a steakhouse or fastfood.n

I use my business debit card in grocery stores when I travel. I buy food that I use for meals because I often work through lunch and also don't want to eat out every night. I have used it in Target or Walmart for supplies, in hardware stores for keys, etc.

I can't think of a single place I could use the card that you should assume it is not business purpose.

Kathleen, I would trust you to not abuse the use of the card but I would not place that same trust in some of my customers. In any event, I will leave it up to their accountants and possibly the IRS to decide. Thanks to all for your feedback.

You may not have as vivid of an imagination as some of the rest of us

Well, thank you, Ed!

I have a variation on this topic that I would like opinions on. When reviewing a different business account we found a large number of checks that are clearly for personal purposes, including some to summer camps with the child's name in the memo line, for tutoring (also with the child's name), monthly checks to a condo association, etc. The customer admitted that business has been slow and that the account has been used for personal purposes. The total amount of the checks that are clearly for personal purposes is over the SAR threshold; is this SAR worthy? If so, is the category Other and would we indicate Income Tax Evasion?

What a company chooses to do with thier money, especially a closely held one, doesn't make much difference. For example, if this is a single member LLC, then it is all in one anyway. They have probably pierced the corporate veil from a liability perspective, but it doesn't sound SARworthy. Without a copy of the customer's tax return, how would you have any idea how they are accoounting for these. Maybe they are treating them as income? Maybe they are just capital contribution withdrawals, etc.

It is a corporation; I apologize for not indicating this before. We won't be filing a SAR but we are closing the account. I appreciate your thoughts.

I agree with RLCarey but I have draw the line on Casino activity and in the few instances we had, we called the customer on it.