Are Businesses that Withhold Overpayments Morally Correct?

Abstract

Business ethics is a code of moral principles and values that seek to govern the behaviors of right or wrong. Most business organizations have customer overpayments on their financial books. Although some organizations and financial managers support an immediate refund and/or reimbursement to the customer for all overpayments, others do not reimburse the customer unless the customer submits a claim with backup documentation. According to an article 16 years ago in Financial Executive (1998), an “audit of a major engineering and construction firm turned up a scant one tenth of a percent error rate in its accounts payable processing; the mistakes still equaled $100,000 that could be returned to the company’s coffers” (p. 1). Today’s numbers reveal significantly more in overpayments. Apparently, these types of errors are not unusual throughout the business community. Both sides of this issue will be analyzed based on the Rotary International Four-Way Test. Should every effort be made by all business organizations and financial managers to reimburse any overpayments?