AMEX Card shenanigans

Paul N

SPFG, Supreme Picture Framing God
Jun 10, 2005
CT, not far from the LI Sound
For those whoa accept American Express, read this and keep it in mid:

Last week,a customer put down %2000 deposit using her Amex card. Next day she called and said she made a mistake and used her company's instead of her own card. She'd stop over and use the other card if possible. Of course, said I.

She came, I issued a credit on her America Express and she charged using another card.

Well, today, my online statement showed that American Express, in all its generous wisdom, had charged $2000 then refunded me $1941!

When I called to see why would they charge on a no-sale credit, their answer? Well, that's their policy. And they would do me "a big ONE TIME favor" and I "should use it wisely" by asking for this one time cancellation of their charges and commissions.......

So, keep this in mind when you issue a credit on their card, you'd lose money, even if there was no sale!

It won't be long till I stop accepting this card from this asinine company. They are just dying to lose customers.
We dropped them years ago when we noticed that they were charging us a monthly fee because we weren't processing a minimum amount of cards....

And then they were dinging us an additional 6.5% on top of the bank ding....

And they never apologized to the American Motorcycle Association for running a specious ad for 2 years after AMA asked them to pull or prove.
Originally posted by Baer Charlton:
And they never apologized to the American Motorcycle Association for running a specious ad for 2 years after AMA asked them to pull or prove.
That's shameful.

And the best part, many of my customers are surprised that I accept "The Card"!

I think I should stop surprising my customers....
Bob Carter and Jim Miller will be one of the first to tell you that you need to accept all the cards you customers want to use.....

We just got tired of accepting one or two a month. Since then, when we tell people, they just switch cards saying "no problem".
I won't use them....My customers also say the same thing, "No Problem" as they reach for another card. The one main thing I don't like about them is the settlement time. In Canada they take up to a week after settlement to give you your money. There reason is that they have to ensure they get there money. Last time I checked they have it at time of swiping. Personally I think they are just playing with the float. The longer they hold it the more interest they can earn. Don't even get me started on the commission fees....
A full 33% of my revenue this year has gone through AMEX so far. That's higher than normal by at least double. Sucks when your cash flow is light and you have to wait an extra 5 business days and then receive just 96% of the money you deposted.

For what it's worth Visa, Mastercard, and Disover will ding me for a refund too unless the sale hasn't been deposited from my terminal yet.

But, hey, what the ****. I lost more than that today by making the stupid mistake of selling to a government agency again. Did you know that you can't easily sue them to get an invoice paid? You have to go all the way to the state capital and file in a special court with special fees and it's never worth it. Well, they know that too. Bastards.
anyone think of charging a percent or two more for the project if an Amex card is used? Would be easy to do if you're using POS software.

Personally, I think it's stupid not to accept any card out there. One thing a customer hates to hear is the word"no" in any shape or form. They may SAY they agree with your position, but don't kid yourself
I believe that might be illegal, per the merchant agreement

It seems that big tickets over $500 are almost ALWAYS paid by Amex(in our shop). I don't know if its a status thing, or a rewards benefit-- but the big spenders love their Amex.
They're the slowest payers and charge a higher percent than most, but a necessary evil IMO.

We started accepting debit cards last week, and are amazed how many people have asked to use them since we put a small sign up. These have a fixed fee instead of a percentage. Are there any drawbacks to accepting DEBIT?
As an AXEX card user, I get pretty irritated if a busines does not accept the card. Sometimes if I'm running a quick errand for the business I just grab the card and go. If it's not accepted, it's a real hassle. I have to go back later or, most likely, I'll take my business elsewhere. I accept all major credit cards as well as debit cards. I figure in 5% on my COG so credit card charges are covered on every sale. It's just a cost of doing business and you have to account for it. If you are 'refunding' a credit card purchase on the same day of the sale, you can usually run it through your processer as a void instead of a refund. Then it doesn't go through the batch report at the end of the day so you can avoid excess charges.
The main reason people pay with AMEX is the rewards program.

Prestige? Sure, if they carry the BLACK one, which is the 6 star plus of all credit cards (you can charge a LearJet on this one, no questions asked!). But otherwise, almost every body has a gold card around here.

Debit cards have absolutely no bad side effects (for the merchant, at least).
Hi Paul-I understand your aggravation, but I am glad you called them and that they took care of it.

Tomorrow, you might have a different point of view

I do hear a lot of slow paying and really high rates. I'm not sure if that is a "processor problem" or an AMEX issue. I can only speak for our situation, but we get paid much quicker (usually a day longer than Visa/MC) and the rate is a little more than a .25 higher. Maybe a call to your processor might yield a little improvement?

I am with Diane and that it is my card of choice. The Rewards program is outstanding and so is their service, so it flies out of my wallet for personal as well as Frame Up expenses. Shops that do not accept it (and there are some) seem to have a certain "attitude" about not accepting it and way too quickly want to tell me why-Not a healthy way to do business

If there is one certainty, we see less and less cash and checks are almost extinct. As consumers use cards more and more, it just makes sense to meet their expectations
Hi Paul -

I was really upset with AMEX last year when I did an annual review of my merchant statments and realized that I had paid $60.00 for the priviliage of being able to Offer AMEX when no customers actually used it. (My store is in a rural area.)

I called to discontinue the card. The representative was very courtious on the phone and explained that they have a program for small merchants. The program only charges me if I have an AMEX sale and the percentage is only slightly higher than my other transactions - VISA and MC - not Discover.

Now if I could only find such a program with Discover. 97% of my transactions are MC VISA or debit. Amex is not as bad as it was and Discover is very expensive to carry for that occasional customer.

I smile whatever card is presented but if the customer gives me a choice I go for the debit.

How's this for AMEX nerve? I reinstated credit cards (MC and VISA) after a long time without (thus making my customers deliriously happy) and I was offered the opportunity to also take on AMEX and Discover (which not one single customer has EVER offered in 25 years!)and although I decided against AMEX and Discover, AMEX sent me a bunch of paperwork and urged me to "sign up" which I HAVE NOT DONE and so they are debiting my account anyways!!!

YIKES! Doncha wish we could all do business that way - just start randomly extracting fundage out of folk's bank accounts! What a RIP!!!

(can you tell my blood is boiling???)
Here are some other points to consider-

After all is said and done (meaning all fees from all sources, Mastercard, Visa, Discover, and Amex, my discount rate, terminal fees etc,) are still just pushing 2%, so any talk of higher fees means you are probably not using the best processor.

When Amex pays into my back account, I receive proceeds from the full transaction, usually within 3 business days. MC/Visa I receive the NEXT business day. Again, a function of your processor.

I only pay merchant fees once a month, at the beginning of the month. So, if your processor deducts the fees at the time of disbursement, you may not be using the best possible processor. And, losing the use of the funds until the merchant fees are due.

It is sort of like opting to pay 100% of your monthly sales tax obligation, where, here in California, we can opt to pay in only 90% of what is due monthly and the balance at the end of the quarter. I sure enjoy the "float" in my bank account and not the state's or credit card processors' for the month that I have it.

I really think you need to look at Merchant Fees like any other business expense (like rent and utilities.) They are a cost of doing business. At my stores in the more affulent areas of town, credit cards make up 99% of my transactions. So, at least 2% of most sales is "eaten" by credit card fees. Who pays for it? My customers- because the fee is built into my prices, just like the COLA that just took effect for my lease (cost of living adjustment)and my new CAM costs (common area maintenance). Costs go up and so do my prices.

Speaking of which, watch for the new Nielsen and Bainbridge prices to take effect any day now. Since your cost of goods is going up, don't you have to raise your prices for increased costs of matboard, fome-cor and metal moulding?

OK another true to life story. For years I did not accept Amex. Nor did I have one personally. Then this guy named Jay Goltz gave me a dope slap on the back of the head and he explained the "culture" of the Amex holder. Bob Carter touched on it in his post......(ask him how his last trip was.) He (Jay, not Bob)also explained the "cost of doing business" stuff about building the merchant fees into your pricing structure. More than that, he explained that (until recently) there were very few "business" credit cards and I was inhibiting some clients from using my services because they did not want to use their personal Mastercard/Visa cards for business purposes and go through the hassle of getting reimbursed.

So, we started accepting Amex (and Discover). Immediately, (and I mean the first day some of my clients found out about the fact the we were now accpeting Amex) they told me that they could now bring ALL of their mounting/matting/framing to me that they were otherwise taking to a big box store (since it was for the business and they really didn't care about it.) Many were architects and lawyers who needed simple mounting and legal exhibits, but it was work and it also lead to other, more lucrative projects. Not ONE of them had told me they were going elsewhere because they could not put it on the company card.

SO, if you are after the corporate/business market, it is food for thought. And, to those of you who say that you have never lost a sale because they always have another card, maybe you made THAT sale, but never realized how many FUTURE sales you lost.

One last point. I live my life through reward and affinity programs. Really.....ask Bob Carter. I tought a class at last year's WCAF show on just how I do it.

My card of preference is now the Starwood Amex card (let's move any discussions about this to another topic.) I bring this up because I almost exclusively charge my entire life on this card and I go out of my way to patronize stores and restaurants that accept American Express. Why?

Next trip: April 2006 - London and Amsterdam with my wife and daughter. First Class Airfare and free hotels (with breakfast) in both cities.
Originally posted by Mike LeCompte CPF:
Personally, I think it's stupid not to accept any card out there. One thing a customer hates to hear is the word"no" in any shape or form. They may SAY they agree with your position, but don't kid yourself, more like idiotic.

As stated above, you better start looking at your merchant fees. Sure AMEX is a little higher but your overall should average at 2% or below. But your rate will depend on your volume which will depend on how many ways you tell the customers that you do not want their business.

Cliff Notes version: Don't be stupid, take AMEX.
Amex is very commerical and if you have large corporate accounts you have no choice. If you are largely coporate, you need Amex whether you like it or not. I got a job through a circle of friends that dealt with the Air force and I had to open a CC acount to get paid. I don't like CC's but I'd rather lose a small percentage through them them than not get the bid. I'll make it back later. If it were up to me, I would do cash or check only, but it is not up to me.
I tell them we take anything but Texaco. They laugh. I like laughing customers. Checks? Hardly ever any more...
We're talking about AMEX rates being too high or Amex being not that much more but no one is putting out numbers so I'll share mine. My rate on MC and VISA is 1.7%. However, the rate goes up for different things. Debit cards used to cost more, but since that huge lawsuit by Wallmart and some others I don't really know anymore. If I do not physically swipe the card the rate can go as high as 4% depending on how much info I can key in. AMEX is 3.9%. Huge difference. Huge. Discover is between the 2 and I don't remember the exact number but it's right around 3%. Only about 1% of my sales go through Discover. I was led to believe that the AMEX rates are fixed unless your sales are very high, much higher than mine at any rate. If anyone is getting below 3.9% I'd really appreciate knowing either here or in a private message.

With these rates it's extremely difficult to achieve an overall cost of 2%. With the advent of debit cards almost nobody writes a check anymore and over 90% of our customers pay with plastic, even corporate ones. ****, I hardly ever write a check anymore, business or personal.
Originally posted by Rob Markoff:
One last point. I live my life through reward and affinity programs. Really.....ask Bob Carter. I tought a class at last year's WCAF show on just how I do it.
I should probably take that class. But in a nutshell, can you explain what is better about Amex than a Visa/MC that offers rewards?

The biggest disadvantage to using Amex IMHO is that then you have two cards, because there will always be some place that won't accept the Amex.
OK, we're not talking just rates and commissions here.

The reason I started this thread is their stupid cancellation / refund policy.

Let's say a customer charges $5000 on AMEX card , then next day cancels. American Express will refund you MINUS their commission.

I don't care how much more business you're doing because of them, you're still being screwed because you paid a huge fee on a no-sale.

What is smart and good about that??

I accept all cards (except Discover; personal dislike, I guess).

And people still do write checks, even for very large orders.
Hey Paul-That is the beauty of owning your biz; you're free to do as you choose. And, we ought not try and talk you into anything

For us it is a viable part of our biz.

Having said that, we just do not have enough refunds (on any card) to amount to a hill of beans

Rob hit the nail on the head on several points for the rest of undecided. That being you ought to shop around for processors to see which provides quicker returns and better rates. They do vary
And, as a user, we, too, look for those that accept AMEX as a primary source. When Rob and I meet at the shows, we often "compare" trips that were Rewards Benefits trips.

David-I feel that I ought to ask for a "referral fee" from AMEX because of all the people I direct. What I like about the program is that it allows me to direct my points into the many partners that I wish to use and that includes the Gift Catalogue, Gift Cards from many stores and you simply cannot beat the Concierge service. No one does it better, in my opinion

But, here is a Bonus Round from Rob's prior advice. Staying at the Hilton this weekend at WCAF? Put every expense on your room tab. You get your HiltonHonors points, then put the stay on your AMEX and Bingo, you just got double points. How often do we pay for Breakfast or buy a round of drinks? Instead, sign for it and double up.

Sure, we use a Visa. Sometimes we hit a place that doesn't accept AMEX. No biggie. We use a Southwest Card. This weekend, we are flying Southwest, but put it on AMEX, and Bingo-Double points again and then I can take my AMEX points and place them into my Southwest Frequent Flyer and even more points.

We use two cards to maximize our efforts and then sit back and watch them multiply.

And, that's why so many of our clients prefer to use AMEX.
Paul, I really am rather certain that Visa, MC, and Discover do the same thing. At least they do it to me. It may be that it changes depending on who your processor is, I've no idea. But I pay for a refund.
Another Amex plus...
We have a card for the business, and a personal card (Amex Blue). The membership rewards program is primary to the Blue card, and the business is linked to the blue for the rewards. All of out personal and business expenses that we can go on one or other of the cards. I don't know of any other rewards program that lets you link your personal and business rewards like that. What I can't put on Amex is paid early to get the discount. There is no fee for the Blue card, and the Membership Rewards annual fees are less when the Blue is the primary.
Ease of use...besides the consierge service...whenever I purchase tickets for an event from TicketMaster they ask if I want to use my Memebership Rewards, no-brainer.

In 30some years of accepting credit cards, I have had one credit to issue. I had to find the manual to read the instructions on how to do it.