Paying with Plastic: Camping Style

by Peter Shifrin

The proliferation of debit cards is starting to change the way camps are paying staff.

In well-run camps, staff members generally find that their summer experience is almost as rewarding as the camper's. Summer weather, fun activities, and new friends all contribute to what many consider to be the most enjoyable summer job available. If it just wasn't so difficult to access their earnings . . . Camp payroll managers, on the other hand, rarely describe the task of paying staff members as "enjoyable."

Fortunately, an interesting new application for prepaid debit cards is helping camp payroll administrators avoid much of the labor while making everyone happier.

Traditional Camp Payrolls

Each year, tens of thousands of seasonal employees work at U.S. summer camps as counselors and other staff members. Mostly students, many of these staffers come from abroad under the J1 Visa program. Other employees are U.S. citizens that must travel some distance to arrive at their summer jobs.

Typically, staff salary and travel stipends have been paid in the form of a check or in cash. While payment by check is the most widely used method, there are still camps that pay in cash. When payday rolls around, these camps must transport large quantities of cash to the camp and disburse it to their staff members. Whether delivered by armored car or retrieved by a staff member with an attaché case (or more likely a backpack), there are obvious security concerns. Once the pay has been disbursed, camps are left with a large group of employees holding tidy sums of cash. Safekeeping now becomes an issue.

Amid concerns over security and accountability, some camps have turned to checks as the payroll solution of choice. While safer and easier to administrate than cash, checks have drawbacks as well. Ironically, one of the biggest issues is converting those checks into cash. To do this, employees require a bank and preferably an account within the bank. Camps flourish in remote, wooded areas. Banks do not. So, staffers often find themselves scrambling to get a ride to the nearest bank, which could be dozens of miles away.

Once at the bank, staff members may have a problem cashing their checks. Many banks will not cash checks for nonaccount holders, or charge a hefty fee for the service. Some camps will get around this by making special arrangements with a local bank, either drawing their checks from that bank, or making other arrangements allowing staffers to cash their checks. Cashing checks can be particularly difficult for international staff, who in most cases do not have a bank account within the U.S. and who may not carry identification that is acceptable to a bank.

As many camp directors can attest, cutting checks is quite burdensome from an administrative standpoint. In addition to preparing the checks, the payroll manager must deal with record-keeping and the problems associated with accounting errors and lost checks Large camps or multiple camps under common ownership may be required to employ full-time employees to manage the process. In some cases, large camps will utilize payroll services to pay staffers, but given the short season, this can be an expensive proposition. Smaller camps must assign the task to a general staffer (often the director), who may or may not be qualified or enthusiastic about the job.

Horizon Camps' Plastic Payroll Cards

It is hard to deny that the world economy is quickly gravitating toward card-based, electronic transactions. While once there were only credit cards, there are now debit cards, gift cards, payroll cards, electronic benefits cards, etc. These platforms have all helped spawn the development of countless industry-specific payment solutions.

One of the instruments with the most interesting potential is the prepaid debit card. While many companies have introduced generic payroll solutions based on the prepaid debit card, virtually no one has focused on the needs of businesses with seasonal or intermittent employment models. Companies like Payoneer, a New York-based prepaid card provider, provides customized payroll solutions for approximately twelve industries including camp.

Horizon, which operates four camps in the Northeast, has used the prepaid debit card system since 2008. We tested the system with one camp in 2008, rolled-out three camps in 2009, and plan to utilize the system in all four camps this summer. Fully implemented, the system will manage salaries for approximately 95 percent of the camps' 1,000 seasonal employees.

Here's how it works. Staff members request their cards before the start of the season through a self-service Web site. The company managing the prepaid debit cards issues the cards and delivers them to the camp where they are distributed to employees. In this manner, staffers will receive the card upon their arrival at camp. We can then "load" the cards with funds on a weekly basis. After that, staffers can use the cards to withdraw cash from nearby ATMs or to purchase goods from any merchant accepting Debit MasterCard, for example.

Prior to implementing the prepaid debit card solution, Horizon paid the staff by issuing a single check at the end of the summer. Staffers were able to request cash advances from the camp office throughout the summer. The entire process was paper-driven and required a weekly trip to the bank, translating into a full day of work for one person at each camp.

When paying with plastic, I could process the payment for 750 people myself in minutes, freeing up four people to pursue other endeavors at their respective camps. The system provides a Web- based interface that allows us to upload a simple spreadsheet for all Horizon Camps.

The program makes dollars and sense, as employees can get their cash from ATMs and stores, which are more common than banks and keep longer hours. Lost or destroyed cards can be replaced almost immediately without loss of funds. International staff find the cards to be particularly convenient because they tend to spend time traveling throughout the U.S. before and after camp (almost 40 percent of Horizons' staff come from abroad). They find the cards to be an expedient payment method and the prepaid MasterCard card can be used at over one million ATMs worldwide. Unlike some debit cards, Horizon's prepaid MasterCard cards only allow camp staff to spend up to the remaining balance, avoiding overdrafts and related fees. Staffers appreciate the cards; we get no complaints.

Of course, no solution is perfect. The prepaid card system is marginally more expensive than traditional payroll methods. The benefits, however, far outweigh the added cost, particularly considering the redirection of labor to more camp-related activities. Other advantages of the system include staff satisfaction, ease-of-use, and straightforward implementation. The camps did run into some third-party payroll reconciliation challenges. In addition, incentivizing staff members to sign up for their cards in a timely manner also required some diligence. Most glitches were relatively minor, which explains why all of our camps quickly embraced the system.

At Horizon Camps, we found that paying with plastic is a viable alternative for compensating camp staff. If the general explosion in use of electronic payments is any indication, it is likely that prepaid card solutions will have an increasing presence in the camp field.

Originally published in the 2010 March/April issue of Camping Magazine.

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