Forum Moderators: buckworks
The main reasons why I wanted to stop Amex were:
1. High rates charged by them
2. Unfavourable chargeback policy: they will issue you a chargeback and fine you $20 if the customer declines the transaction for any reason. You have NO recourse.
The cumalitive loss of 1+2 above was approximately 4% of our turnover (or 40% of our profits)
In Jan 2003 I discontinued accepting Amex. After 6 months, I am happy to report that we have not experienced any loss in sales. Additionally we are saved the aggravation of all those chargebacks. That's a gain of 4% + no aggravation!
We find that nearly everyone who has an Amex also has Visa/Master. in over 10,000 transactions a month, for the last 6 months, we did not come across a single case where we lost a customer because we did not accept Amex
>> nearly everyone who has an Amex also has Visa/Master
Thats very telling, IMO. One of the greatest challenges in any business is identifying and eliminating your problems. Amex should take care not to be percieved as a problem
We just built the fees into our prices.
Your clientele will determine what cards you should carry, of course-- woe to the tourist souvenir shop that does not accept JCB-- but with the recent decision which declared Visa/MC in violation of US antitrust laws, there will be a proliferation of Discover, Amex, and maybe others in the US market. Who knows, maybe we'll even have Amex debit cards in a few years.
there is going to be a higher percentage of users when selling b2b but in b2c it is more likely they will just reach in and pull out vc/mc/disc.
Since I stopped taking them I have only had a handfull of inquiries, b2c , and have seen no noticable drop in sales that can be attributed to it.
Well done Namaste.
I would point out however that it does depend on your clientele or market segments targeted.
For example, I have only AMEX but not VISA/Master so i am obviously not in your demographic as you say you did not come accross a single case in your customers/prospects like me!
The problem of people going to your competitor who DOES accept AMEx is minimilized i guess if your competitors marketing to same demographic also do not provide AMEX.
As i said in that earlier thread i have on at least 3 cases in memory ordered from one supplier than another on the basis that they were the only one i could pay simply and in accordance with company preocedures because they did. But i guess if your area is consumer and not b-to-b or business, you may not ever come acrross this problem.
Amex card holders do not seem at all surprised when told we don't take it, and always seem to have another card ready...
B2B- Accept AMEX!
B2C- Probably not necessary!
If you are B2C and you sell expensive equipment (goods), you can always try to sign on with a deferred payment program through a bank. It's usually a Visa or MC but it gives the customer an option to set up a payment schedule at no risk to your business.
"Six months same as cash"
"No payments for a year"
"Nothing down $79.99 a month"
you know what? AmEx sent me a amil that they are not profitable with my business.
Hmm.
I do not think AmEx affects my business.
I only have Amex as it offers a lot of value added benefits.
If a site does not accept Amex I will not buy from them it is that simple (I also refuse to pay through 3rd party systems such as PayPal etc because of terrible experiences), but as mentioned above if your competitors also do not accept Amex perhaps everyone such as myself is purchasing in the real world virsus online.
I must say that I use a travel agent that stopped accepting Amex so I am forced to pay cash, but the only reason I have stuck with them is because they offer me special deals that no one else can match - otherwise I would have gone elsewhere and still would.
Recently I wanted to buy some DVD's, I selected about ten I wanted went to the cashier who then told me they did not accept Amex so I left them as I did not have the cash at hand.
If Amazon did not accept Amex I would not have bought from them. My host at one time decided not to accept Amex, I told them I would have to leave (even thought that would have meant enormous work) if they did that and thankfully they still accept Amex.
I say why even loose one sale that could lead to hundreds of others through referrals - give the customer as many valid payment options as possible.
One customer in a THOUSAND asks for Amax and in 95% of the cases, he/she has another way of paying.
Frankly, many commerce sites offer too many options that complicate the selling process. Lot to be said for the K.I.S.S. method of retailing.
In my experience (almost exclusively selling over the phone) the vast majority will pull out a Visa or whatever.
However if we accepted Amex we would have to take it not only from the people who will only use Amex, but from all Amex card holders. This costs money with higher charges etc.
For our business, with high values and low margins, the maths just doesn't work out - turning away the few customers who insist on Amex is cheaper than taking Amex from everyone who wants to use it.
"I say why even lose one sale that could lead to hundreds of others through referrals - give the customer as many valid payment options as possible."
If that's true, why not run SuperBowl ads in order to pick up a few customers who will shop your site for the rest of their lives and tell hundreds of friends about you? (insert laughter here)
That logic would lead to an infinite array of confusing services (wish lists, tell-a-friend, gift certificates etc) plus huge and redundant product offerings, free shipping and give-a-way prices.
A customer is valuable but not infinitely so.
---
I do agree that Amex may be important for selling luxury-goods or products to small businesses. If I had a dinner restaurant in Manhattan, you bet I'd take Amax.
---
The point about Amax engendering trust has a morsel of validity. But there are so many better ways to look trustworthy on the web. (800 numbers, customer endorsements, guarantees, brand name products, professional-looking site, etc.)
Taking Amax might also make a site look expensive to bargain hunters.
My rule is that nothing should be on a commerce site that doesn't significantly contribute to increasing PROFITS. For many businesses, Amax is just more clutter.
Now I'm free of all that. Sure there are chargebacks on Visa/Master, but they are at the rate of 1 in 1000+ . And Visa/master do fight your case and sometimes we do get our money. With Amex there is no recourse...they give the merchant NO option to prove product delivery. The chargeback is final.
Perhaps in a B2B situation where there are established contacts with buyers Amex is ok, as those people are unlikely to chargeback, but in a B2C situation, you are better protected with Master/Visa.
I would also like to add that from 1st June Visa/Master have implemented 3D secure, which eliminates fraud also completely. Amex is nowhere near such security protection.
