Why Some Merchants Don’t Accept American Express

Mariel Leibowitz

By Mariel Leibowitz
Posted on Fri Sep 27, 2013, Last Updated on Wed Sep 24, 2014

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Why Some Merchants Dont Accept American Express

“Sorry, we do not accept American Express.”

These are seven words I hate hearing. If you’re a loyal AmEx user, you’ll agree. It’s frustrating when you want to pay for something but you can’t. All of this drama because of what? Merchant fees?

An analyst at American Express explained the inner workings of a relationship between a small business and American Express.

He started off by telling me about the card’s discount rate — a fee paid by merchants to credit card processors. This is the fee that small merchants are always trying to avoid.

American Express has a discount rate between 2-3 percent. Based on how large the merchant is and what type of business it is, American Express will determine their fee, which will be locked in by a contract.

Debit or Credit?

This rate is not necessarily higher than other credit card companies. The analyst at American Express pointed out that a lot of merchants are confused when it comes to debit and credit rates. When merchants accept cards such as Visa and Mastercard, but the customer chooses to use their card as debit, the transaction has a smaller discount rate, usually one percent. Merchants see the one percent on their statement and assume that they’re paying less with those cards, but they’re not. AmEx can only be used as credit, which results in merchants only having to pay one fee.

American Express has an annual purchase volume of $888 billion. To me, it doesn’t make sense as to why small business owners wouldn’t want to accept the card.

“American Express cardmembers are willing to spend more and be more loyal to their cards by only going to businesses where their card is accepted,” the Analyst stated.

The Real Benefits of AmEx

To see if small businesses actually found it beneficial to accept American Express in their establishments, I spoke with two people who run a small business in the Los Angeles area. I sat down with Matt Wise, general manager of The Roger Room, a cocktail lounge. “It’s really worth the small fee,” said Wise.

He agreed with my feeling of astonishment when retailers won’t accept AmEx cards. “I prefer when it is easy to exchange goods and services. Any friction in the process can detract from the experience itself.’”

Lillian Cavalieri is the founder and CEO of iPrecinct LLC, a political data technology company that provides campaign software to enhance overall quality of game strategy. She also happens to accept American Express and enlightened me on just how beneficial it can be to have this card on your side from a business owner’s standpoint.

“We have way more sales using American Express. Thirteen percent more,” said Cavalieri.

In fact, Cavalieri said customers would frequently ask if iPrecinct accepted American Express, to the point where she put up an icon on her site notifying the public that they do take it.

She also informed me American Express is excellent when it comes to discrepancies. She said if there is an issue between the business and the customer, American Express will resolve it within 24-48 hours, unlike other cards that can take two to three business days to fix the problem. This allows Cavalieri to deliver faster service, which is key to a business that is built on delivering data quickly.

The source at American Express said the number one customer complaint is why a merchant will not accept their card. Once this happens, American Express will actually call the merchant to find out why they don’t use them and to see if they will start.

(Disclaimer: MyBankTracker was not compensated from American Express for writing this article.)

 

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  • james m

    My personal experience in the bankcard/merchant services industry allows me to attest to the extra hurdles required when working with AMEX. Nobody will probably ever read this and im not talking down of AMEX. I always saw it as their unique approach to being a card association. Rates always vary depending on the iso or signing agent. From my observation, higher scale places primarily use amex. Another thing that determines rate is how the transaction is processed. It can be done through the merchant services one is contracted with or have an amex acct directly.

  • Mike

    Now we know why the sponsor small business Saturday!

  • Joe

    I am a merchant and I DO NOT accept American Express!! They charge way too much, and they take their time to pay!!! I have not lost a single customer either, as customers always have Visa or MasterCard.

    • Mrs. D.

      Maybe you just don’t realize you are losing potential customers, like myself, for one. When I find a merchant that does not accept Amex I may shop once but I guarantee you I will not be back. Like the post said Amex users are very loyal. This included the merchants we choose to frequent and believe me WE LIKE TO SPEND! Why wouldn’t you want my business?

      • jhouser

        Agreed, I often get to the signage on the building that shows what they accept If you don’t accept Amex I don’t even come into your building so why would you even know you are losing my business?

    • BNB

      You are definitely losing business. AMEX holders are notorious for not shopping at places where their cards are not accepted. Me included.

      As a business owner myself, I can tell you that the fees are trivial compared to VISA/MC/DISC, but that AMEX customers tend to spend substantially more money – as in 35% more. AMEX is the #2 card used behind VISA at my business, more than MasterCard.

      Not taking AMEX is extremely foolish.

      • ANYTHING BUT AMEX OR GTFO

        So, how long have YOU worked for AMEX? Or are you just an ignorant rich bastard driving his Mercedes or BMW all over town to save a few pennies by patronizing the box stores? That’s the demographic who exclusively uses AMEX in my area.

        Stubbornly insisting on paying every merchant you patronize with the worst payment method possible isn’t just foolish–it’s base, greedy and counter-productive in the long run.

        There’s a reason AMEX is the least accepted card in America: it’s the WORST form of payment businesses can accept. I’ve appended the “support local businesses” AMEX sign to include “DON’T USE AMEX” at the bottom. My decent, loyal customers love it, and usually break out their debit card if they don’t have cash.

        And before you launch in to all the business I’ll lose by not servicing aholes like you, I DON’T WANT OR NEED BUSINESS FROM AHOLES LIKE YOU. So go ahead and keep your AMEX card and take your morally bankrupt patronage with you–that way we’ll both win.

        • BNB

          Such hostility and class-hatred. I’m sorry you are having such tough times.

          Sounds like you have yourself to blame for being an ignorant poor bastard.

          Care to explain why AMEX is the “worst payment method possible”? We do thousands of credit card transactions every month. I’m going to let you in on a little secret. 98% of merchants that take cards, take AMEX. You are in the 2% of clueless “aholes” who are too stupid to figure it out.

          So what haven’t you figured out? That in many scenarios, AMEX rates are about the same as a non-qualified VISA. And guess what? When a customer pays with AMEX, the money shows up in our account all the same. So please tell me, wise one, why should I be mistreating customers because they prefer AMEX?

          I’m glad you also admitted that it’s the rich people driving around in their fancy cars with AMEX. As a business owner, I like it when people spend money with me, so it’s nice to have “rich aholes” give me money for our products. I appreciate them.

          You can take your Wal-Mart hatred and shove it. I’m morally bankrupt, while you turn away business, and thus jobs, for small business, then complain about Wal-Mart and “big box” stores taking everything and destroying America….. You, my non-friend, are an idiot.

          I’ll continue treating customers the right way. Taking their preferred method of payment, because, it doesn’t actually cost me anything extra, and continue creating jobs and growing my small business. You can whine about rich people and laugh about mistreating customers, I much prefer to just be rich by treating people correctly.

          Good luck, or not.

      • Katy

        There’s an easy way to solve this issue, every retailer should push the cost of accepting AMEX onto their customers. Charge a 5% fee onto of the sale for Amex cards. That’s the only way you’ll get AMEX to be accepted anywhere. Most retailers in Europe don’t accept AMEX, it’s Visa or Mastercard.

        • BNB

          Nonsense. I find that just about everywhere that takes credit cards in Europe takes AMEX. A bigger issue for me when traveling overseas is most cards use chips and many smaller shops don’t even know how to use a swipe only card.

          If you hate your customers and want to go out of business, by all means, blindside them with a 5% charge for using their preferred method of payment. Of course, this is also illegal in many states….

          Me? I’ll take payment however my customer wishes to pay. And considering my biggest spenders use AMEX, I take it with a smile and focus on making them happy. The aggregate cost of accepting cards is factored into my pricing and operations – just like any other successful business.

          And as I’ve also explained, many newer companies like Square charge a flat rate regardless of which card is used.

          Hating on AMEX is extremely amateur when it comes to business.

    • ANYTHING BUT AMEX OR GTFO

      I’ve owned a small business for 6 years and every customer worth having understands that AMEX charges the MOST of any credit card in the US (fact) AND takes the longest to pay the merchants (fact). If you refute this, you obviously don’t own a business and don’t know what the F you’re talking about. I bust my hump to help and treat everyone fairly. I’m not about to pad my prices to offset AMEX robbing me of 10% of my margin (they charge 3+% total and I operate on a 30% margin), and kiting my funds for weeks at a time. Customers love Amex because of the perks. Merchants hate them because THEY’RE the ones paying for those perks.

      If a customer wants to express loyalty, they’ll pay with any method of payment other than the worst one possible–AMEX.

      And if the customer is so greedy/callous that they’ll withhold business because the merchant won’t let themselves be robbed by accepting AMEX, well, GOOD RIDDANCE to those rotten a$$ customers. Let them get their perks elsewhere, knowing that they’re contributing to the continued erosion of small business in the US.

      • BNB

        AMEX charges the most? Not if you use PayPal or Square. All rates are the same, and quite reasonable. But I guess the millions of people using these services obviously don’t actually use these services…. because you are a genius!

        That 3% you are whining about? Do you not take ANY credit cards at all? Because the guy coming in with his VISA Rewards Card, most likely you are paying in the high 2’s, around 2.8% or sometimes more. Get that, genius…….

        How you can link AMEX to an erosion of small business is beyond me. You say you won’t take a customers credit card as a form of payment, thus “good riddance” to that customer. Then you complain about how this same customer, who tried to give you their business, is eroding small business because you won’t do business with him.

        Oh. My. God. You are an idiot.

        As for taking longer to pay. Who cares? A successful business, of any size, isn’t crying over waiting 2 days for credit card payments to be deposited.

        We have established that you have no idea what you are talking about when it comes to the rates. You have the business acumen of a turtle, and you run a miserable, possibly failing business.

        Great…. just the person I’d love to take some more advice from. Keep it coming.

        • PC

          HERE HERE. WHERE DO THEY FIND THESE CLUELESS AMEX HATERS?

  • Jenny

    As a small business owner, we are currently accepting all credit cards, but we’re contemplating dropping AmEx. I have clients that use multiple cards and I would not be worried about them not coming to me if I did not accept AmEx…..most people have multiple reward cards. Yes, the discounts and rates and fees once you break it all down by company is probably nickels and dimes (AmEx is always higher though) – HOWEVER – Visa, MC, & Discover drop into my account next day and AmEx takes 4, sometimes 5 business days. This makes a big difference for my company while we are struggling right now and depend on funds being available in the account. I’ve noticed too that many of my clients that had previously used AmEx, have now switched to Visa or MC accounts – either because other companies don’t take it or maybe better offer? Not sure, but AmEx is used in about 1/4 of my sales and the majority of those people have other funds available to them….they are merely collecting rewards and due to our local reputation, I don’t think they would shop elsewhere just because we didn’t accept AmEx (we have an upholstery shop and are one of the few in town that actually accepts cards to begin with – most are cash/check only).

    • PC

      Trust me, as an AMEXer, I would drop you in a heartbeat. I stopped going to one of my favorite restaurants because of this line of stupid thought. You people don’t seem to get it. It’s not the money; it’s the security we get with AMEX. Whenever I’ve had an issue with a charge with other CCs, I always get the shaft. Whenever I’ve had an issue with a charge on AMEX, it’s resolved immediately and almost always in my favor. I’m not a whiner, and I don’t make bogus claims. Anyway, what you people fail to see is that we use this card because of the way we are treated. At least for me, I’m sick and tired of every other CC, and I will not use them. Sometimes, usually when I’m going oversees, I’ll put a few hundred bucks in a prepaid visa, but that’s it. So, the next time you think about cancelling AMEX over a few pennies here and there, remember that you’ll be losing some people’s business.

      YOU’RE BEING PENNY-WISE AND DOLLAR STUPID.

      • Raf Callas

        PC, you state valid points. While it’s essentially a matter of personal preference, AMEX does have this feeling of exclusivity. I agree with the customer service point. But I wouldn’t necessarily count out ALL credit cards. Visa and MC still remain the “top dogs” of credit cards.

      • This guy…

        The fact that you ‘demand retailers’ to accept a form of payment you simply prefer is stupid. If you want to spend money, bring cash, otherwise you’re just being a point-whore and cash STUPID.

  • Gustavo

    We are a small merchant and we considering taking amex of our payment system. It take longer than other CC companies and sometimes “they loose” the payments.
    Also they charge MUCH more than other CC.
    I am already started to say no to AMEX and I will cancel the contract with them.

    • Oyee

      I have taken AMEX at my Auto Repair business for over 25 years and I am absolutely convinced that taking AMEX has helped attract business. It does take a couple days longer for my money to reach my account but I know for a fact that there are curtain customers that will go elsewhere if I were to stop accepting AMEX. I am in Utah and in recent years the state has allowed us to charge a “convenience fee” for credit card transactions. So I now have a sign on the entrance desk that says “there may be a 2-3% convenience fee if using a credit card for payment”. For some reason we have had a higher amount of cash transactions in the last 2 years.

      • BNB

        Be careful with that convenience fee. You are more likely to lose customers this way than by not taking AMEX. I would never return to a business who charges me 3% extra because I pay with a card.

        You do have the right idea about taking AMEX. There is no reason to add a hurdle to your business. Keep customers happy, always.

  • http://billcollectorshateme.wordpress.com/ Bill Collectors Hate Me

    I like the fact that AMEX is not accepted everywhere because it minimizes my purchases with the card. It’s a win-win for me!

  • https://twitter.com/thehiredmind Hired Mind

    This strikes me as a big puff piece for Amex. The section on actual fees provides zero information other than “This rate is not necessarily higher than other credit card companies.”. Where are the comparisons to other cards? The writers had interviews with several merchants. Why not ask them what their fees were? And if they aren’t allowed to discuss the fees due to a contract with Amex, that’s relevant – why not print it?

    The idea that tens (hundreds?) of thousands merchants who don’t take Amex are just not paying enough attention to their bills, or that they’re not doing their research is laughable. Are we to believe ALL of these people (whose *job it is* to do cost/benefit analysis on a daily basis for their businesses) are wrong?

    • http://billcollectorshateme.wordpress.com/ Bill Collectors Hate Me

      I have an AMEX and although it can be a pain at times, I actually like that it’s not accepted everywhere because it saves me money. If not for the limitation I’d be in much greater debt!

      • “Arox”

        It’s all bout swagger.. wen u seated next to that skirt n she sees u pay with your AMEX.. Boi best believe that she begins to get moist south of belly button… Wink… It shows a responsible person with credit….. Keep flying HIGH AmEx users……

        • http://billcollectorshateme.com/ Bill Collectors Hate Me

          I have to agree that AMEX comes with a certain amount of status attached when you plop it down on the counter. That’s the main reason why I got one!

          • ANYTHING BUT AMEX OR GTFO

            Sure does: it says “I’m so rich I expect people to take a loss servicing my greedy a$$”. Hope that title suits you.

          • BNB

            If you take a loss over a 3% credit card fee, then you need to close your business and get a job at McDonalds packing french fries into paper containers. It suits you better.

    • BNB

      If a merchant is using a service like Square, the fees are identical regardless of card used. Same with PayPal.

      For me? I do millions in credit card sales every year. VISA is the most used, followed by AMEX, then MasterCard. Discover is a distant last. I deal in business to business, so it tells you a lot just how many real purchasers use AMEX. It would be suicide to not take it.

      I can tell you that AMEX transactions are 35% higher than VISA. And their rates are nearly the same as the non-qualified VISA rate. Which means the same as any other business rewards type card. A standard credit card (no rewards program) will be lower than AMEX.

      If a merchant were to complain about AMEX fees and not take AMEX, but then take a VISA Platinum Rewards or whatever card, then that merchant is just clueless and making poor business decisions.

  • ישי..

    been loyal to a credit-card is ridiculous.

    • http://billcollectorshateme.com/ Bill Collectors Hate Me

      If you’re loyal to AMEX then AMEX will be loyal to you! It’s a win-win!

      • ישי..

        loyal to me, eh?
        you mean what?-
        of course I can hold their card as long as I desire.
        and if I’m in a need- they will not be there for me.
        you are one of millions of costumers, they don’t care about you.
        so, what good comes holding this card? (except for the fact that it’s transparent and it’s kind of cool).
        a credit card is useless if you must have another one “just in case”.
        I have only one card in my wallet, and from now on it won’t be amex

        • http://billcollectorshateme.com/ Bill Collectors Hate Me

          To each his own, I guess!

          • chris

            If a business doesnt take amex I shop elsewhere plain and simple. I tend to run 10k a month through my amex so thats a lot sales for merchants.

            Theres too many choices to shop at places that do take amex instead of dealing with ones who dont and use another form of payment. My sales more than make up for it.

  • randy

    My issue as a merchant with AMEX has nothing to do with their fees, I understand that as part of doing business. The issue I have is that AMEX has created a reserve against my account more than half dozen times in last couple of years. Only one of these was for a complaint from a customer, that was fraudulent. i gave AMEX all the backup and they cleared it up (not quickly by the way). The other reserves were placed as it was explained to me “because the computer flagged it” and they just wanted to put hold on my account until they could look into it. In addition the one time I had the complaint that was in the amount of $22,400 they would not release any of the money they were holding which was in excess of $100,000, this made absolutely no sense to me and again I was told that was policy and nothing they could do until complaint was resolved and as a matter of policy any other monies that were put into account would also be held. The number of hours on the phone trying to talked to somebody that could give me an explanation were hours wasted. I want to accept AMEX but as a small business owner these “policies” are making it untenable for me. Anybody else have this kind of experience with AMEX.

    • ANYTHING BUT AMEX OR GTFO

      The Durbin Amendment passed in 2010 FINALLY frees merchants to pass on the fees associated with merchant service processing. So all those rich greedy pricks with their AMEX cards can enjoy paying savvy (non-chump) merchants the extra 3% it costs to accept their horrible, horrible payment method. It provides a litmus test: if the rich greedy customer balks, they have demonstrated a fundamental lack of decency and can henceforth take their rich greedy business ELSEWHERE. I don’t require much–just a minimal semblance of basic decency in order to serve someone. If a person insists on robbing me by paying with AMEX, they lack that basic decency and aren’t welcome in my store. QED.

      Does that title sting, rich greedy readers? GOOD! You need a reality check, even if you refuse to heed it.

      • BNB

        You have a lot of hatred for the rich. Sounds like you finally gave up on life, realized you were lacking too much cognitive brain matter to succeed, and now throw your hatred around at everyone smarter than you.

        Any VISA with a rewards program will run a fee of nearly 3% as well. But you whine about AMEX only?

        You think a customer balking at being charged 3% extra shows a lack of decency? Yeah, makes sense. A customer not happy with being mistreated, those rich scumbags! I hate rich people, down with Wal-Mart.

        This is you: “Take your rich ahole business elsewhere.”
        Next breath: “Rich people are horrible, killing America by not shopping at my store”

        Oh, Lord help this idiot.

    • http://www.mybanktracker.com Simon Zhen

      Randy, while I don’t know enough to comment on your particular situation, thanks for providing the merchant perspective of working with AmEx.

    • BNB

      I’ve never experienced this issue with AMEX, personally. I wouldn’t be happy with them either if this happened to me. I’m curious if this is only an AMEX policy or if this could have happened with VISA or MasterCard in similar circumstances.

  • http://www.whoacceptsamex.co.uk Who Accepts Amex

    Because of this problem we created http://www.whoacceptsamex.co.uk to help American Express card holders find who does and doesn’t take it.

  • sue

    I kindly suggest that Mybanktracker do more research before writing such an article. It is not just the interchange rate + merchant fees the retailers are upset about, we are upset that we are charged a percentage every time a customer collects on their rewards from these companies. I’m all for the customer getting rewards, what I am not for is the creditcard companies getting an insane amount of money from customers and merchants and making like they are the nice guys dipping into their bottom line to make their users happy.

  • ravibeli

    I purchased gold in Bheema Jewels about Rs1.3lakhs, they do not accept AmEx card, and if I want to swipe it then I need to pay 2% amount of bill amount. I had no other alternate I paid them. :(

  • chicagoCabbie

    I don’t shop where AMEX isn’t
    taken ………..I think the REAL
    reason SOME merchants don’t accept AMEX is they don’t want to give the
    customer the POWER

    Amex gives to the customer.. If there is a problem with a purchase Amex will

    “pull” the money back from the merchant until the
    problem is resolved. Merchants don’t do anything else until its resolved
    because the money is gone.. With Visa & MC it takes months and a thousand
    phone calls and if in the end you want your money back it may not happen……With
    AMEX you already have your money back and it only took 1 phone call to Amex and
    they pulled it back while you were on that phone call………

  • DanielMyers

    We are a small business and are going to drop American Express next week. Yes their fees are higher, but that isn’t the reason. They started taking an extra 28% out of all transactions without telling us, no email, no phone call, no letter. When we called them on it, they said that they didn’t have our EIN so because of that they had to send 28% to the IRS as federal witholding. When I asked them why the never contacted us they responded by saying that they tried to call us on April 25th of this year. I asked why they didn’t leave a message and they told me there was no option for voice mail. They must have dialed the wrong number, because we have plenty of voice mail options. We recently ran a $10,000 transaction and this is how we discovered the issue when only $7200 was deposited in our account. We didn’t notice from all of the small transactions, but this one stood out. So we reversed the charge and refunded the customer. Guess what, they refunded $10,000 out of our account to the customer! When we contacted them about the $2800 that they were holding they said we sent it to the IRS you will need to get it back next year when you file your tax return. NEXT YEAR! So if we file in March which we typically get an extension and file around June, we might get the money back by next August! We were told too bad by AM EX customer service. Turns out they have $16,000 from 2013 that we just found out about as they never sent us the 1099k they were supposed to until we requested it. We didn’t have this issue with MC,Visa or Discover. STAY AWAY from American Express. As far away as you can as a business. You don’t need it.

  • everydayjohn

    I have a new Gift card from American Express issued in late 2014 as a prepaid gift card. ARCO Gas Stations in Los Angeles, CA do NOT accept AmEx cards.
    Buyers beware! Yet my year old VISA Gift Card worked instantly at ARCO.
    I suggest others read the comments below and do not send GIFT CARDS of Am Ex to your family or loved ones.

  • Larry Brantley

    Interesting information to know. I use American Express to the extent
    that after being told that a place of business does not accept it I ask
    why not. I have never received a satisfactory answer. I simply tell
    them that I won’t do business with a company that does not accept it. I
    leave the product(s) I had intended to buy on the counter and leave. I shop
    elsewhere. I am especially picky about services businesses. AMEX settles disputes quickly and with no problem. I won’t touch a Discover card. They almost always side with a business even when the customer is being ripped off. I have a MasterCard that is also a Debit card that I use for gas, groceries, and other relatively small household items. I always ring it as a credit, because I don’t want to remember too many PINs. I seldom use cash as it is too easy for someone to steal, and using a card, especially specific cards for specific categories of purchase makes record keeping simpler.

  • Loading

    AMEX users are a dying breed, as they should be.