Take off your entrepreneur hat for a moment and replace it with consumer headgear. Now, imagine yourself attempting to make a purchase at a local store using your American Express card. “I’m sorry,” you are told, “We don’t accept AmEx.” This isn’t the first time your card has been refused, but it makes you wonder why. Now, switch to your merchant hat and let’s find some answers.
The Truth About Merchant Fees
Many small business owners choose not to deal with American Express because they believe their merchant fees are too high. AmEx charges between two and three percent. On the surface, this rate appears higher than the one to two percent that Visa and MasterCard charge. However, a closer look reveals that these lower rates are only in effect when the customer uses the card as debit, not credit. By contrast, American Express takes credit transactions only.
The Benefit Of Additional Sales
Think about this for a moment: AmEx customers charge a staggering $888 billion dollars annually. What’s more, they tend to be very loyal to their cards. This phenomenon is indicated by the fact that many people will only do business in stores that are willing to accept American Express.
Pleasing The Customer Is Key
As a business owner, you know that the people who buy your products are at the top of your priority list. Making every aspect of their experience in your store positive can go a long way toward ensuring that they will return again and again, as well as spread the word about you and your products to their social network. For a customer, any impediment that adds frustration to the payment process reflects poorly on your business. Although you might balk at paying the small fee involved in accepting their cards, AmEx might just turn out to be one of the best investments you ever made.
In Case Of Discrepancies
Sooner or later, you will need to deal with the occasional discrepancy when customers use their credit cards. In the case of Visa and MasterCard, it can often take several days for the situation to be resolved. Contrast that with AmEx, which typically will get back to the merchant within 24 to 48 hours. That translates into faster service and happier customers.
The next time you imagine yourself at that cash register speaking to a small business owner who blithely tells you that your American Express card is not welcome, you might want to share some insights. Perhaps the owner does not know that the so-called higher charges are not exactly as they appear; the potential for enriched sales is great; and he or she may be missing out on a bevy of ultra-loyal customers who will go out of their way to patronize the business. The only question that remains is this: are you ready to take the step to accept this popular and often-misunderstood card?BLOG COMMENTS POWERED BY DISQUS