AMEX Chargebacks

Are benefits to their cardholders being chargebacked onto merchants

[derekwong28]

I am thinking of accepting AMEX but have heard a lot of adverse comments about their chargeback rate on this and other forums. Looking at their brochure for a platinum card, I found the following. I wonder whether they are passing the buck of all these benefits onto merchants in the form of chargebacks?

1. If the cardholder is unhappy with a purchase made with The Platinum Card, bring it to AMEX within 30 days of purchase and they will issue a refund.

2. If, within 14 days of buying at full retail price, the cardholder see an identical item for purchase at a cheaper price as an alternative retail outlet, they will refund the price difference.

3. 100 Days Cover - any loss arising from theft and accidental damage within 100 days of purchase will be reimbursed.

4. Purchases made will be entitled to an additional warranty for up to one year.

Condition 1 and 2 sounds very alarming to me if indeed the merchant is subjected to a chargeback. I hope 3 and 4 are not passed onto merchants. Can anybody comment on this? If they are not passing the buck onto merchants, why would their chargeback rates be higher than VISA or MC?

[Corey Bryant]

I think only number one is passed back ot the merchant. All others, should be covered by American Express.

American Express can & does charge more for processing but should not penalize you just because another company has a sale.

Having an American Express card entitles the cardholder to extras and basically this is them.

The differences with AmEx and Visa / MasterCard, you have thousands of issuing banks out there that have different policies for their customers.

-Corey

[LifeinAsia]

As a merchant, I really don't like AMEX's policy (#1 in your list). It basically gives the cardholder unlimited power to wiggle out of paying for almost any reason under the sun. They make it way to easy for a cardholder to say something like, "I stayed at a hotel for a week. The room was a little noisy. I was too lazy to ask the manager to move me to a quieter room, so I decided to just dispute it with AMEX when I got back." Instead of being given the opportunity to fix a problem, the merchant (hotel in this case) long after the fact learns of the problem when there is nothing that he can do, except eat a chargeback and/or refund.

I can only hope that AMEX tracks cardholder behavior and gets progressively less likely to side with the cardholder if there is a history of disputing every charge ever made.

We have been accepting AMEX for payment for about 3 years. In the begining, they absolutely sided with the cardholder, almost no questions asked. Several times we seriously considered not accepting AMEX any more because of this.

Since then, they have become more reasonable. Instead of "cardholder doesn't recognize the charge- instant chargeback, full refund issued!" they have become more like "the cardholder does not recognize this transaction. Please provide supporting documentation to help us resolve this dispute." I think some of it may stem from how the cardholder disputes the charge ("I don't recognize this charge." vs. "This is fraudulent activity on my card!"). But if the pendulum swings back the other way and over favors cardholders, we will definitely stop using them, even though it would mean losing some reservations by business travelers that only use AMEX.

I also hope that AMEX is keenly aware that if they become too overly pro-cardholder, other businesses will follow suit and stop accepting AMEX as well.

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As a customer, however, I must say that I DO appreciate AMEX's policy. :) It gives me a lot more leverage with stupid companies who don't have anything resembling customer service and refuse to listen to any complaints.

[CernyM]

Over the last year, our average AMEX ticket was 22% higher than our average Visa/MC ticket and had a lower overall chargeback rate.

[Essex_boy]

I always inagined that it came out of their charges to the merchants, after all you have to be earning £44k to have one so your going to make AMEX a bundle.

So your saying its not?