AMEX not accepted or surcharge

[fairbasa]

I hear you, but wouldn't a business just see this as yet another expense, and price their goods accordingly? As there are many that don't charge the Amex surcharge, it is obviously something they just build into their prices and everyone pays it or perhaps simply absorb and claim it as an expense on their tax return.

This is what I'm saying though, it's a fee which they only incur with people paying by AMEX. Adjusting their pricing to compensate for the higher merchant fees means everyone who doesn't pay AMEX is being penalised. Not adjusting their pricing to compensate means the merchant is absorbing the cost, ultimately hurting their bottom line. We're really talking about should it be a 'user pays' model. The difference between merchant fees and most other business costs are that the consumer has the option to avoid this charge.

 

[Moopere]

Another option to avoid the JB Hifi surcharge is (and this only works if you know the item you want is available online) to purchase it through the JB Hifi website, checkout using Paypal and use your AMEX card to pay (without the surcharge).

I'm using Paypal more and more these days with Amex as the payment method. This boggles my tiny brain though. I've had a quick scan of the costs involved for merchants accepting Paypal and they are extortionate! Yet there are nowadays a lot more retailers accepting it with no surcharge ... this can't possibly be costing them less than simply upfront accepting Amex ... surely not? I mean Amex is making their wedge with the Paypal transaction, paypal then makes their not insignificant wedge as well ... the retailer has got to be eating something like 3-4-5% or possibly even more?

 

[yohy?!]

This is what I'm saying though, it's a fee which they only incur with people paying by AMEX. Adjusting their pricing to compensate for the higher merchant fees means everyone who doesn't pay AMEX is being penalised. Not adjusting their pricing to compensate means the merchant is absorbing the cost, ultimately hurting their bottom line. We're really talking about should it be a 'user pays' model. The difference between merchant fees and most other business costs are that the consumer has the option to avoid this charge.

and if most pay by cash it likely costs them more per transaction to bank the cash (and for theft) - and what about those that either don't buy or don't become repeat customers due to Amex suppression?

 

[fairbasa]

and if most pay by cash it likely costs them more per transaction to bank the cash (and for theft) - and what about those that either don't buy or don't become repeat customers due to Amex suppression?

Understand your points, and I again emphasize I'm firmly in the AMEX shouldn't incur a surcharge camp a) because it benefits me and b) AMEX holders I'm sure spend more. But you can understand high volume low margin stores like MSY feeling a significant hit from a ~2.5% surcharge.

We're talking hypotheticals a bit here, my experience in retail is that salaried managers typically do the banking so there's no direct cost implication unless you're talking lost productivity (which in retail is a long bow to draw ). I do agree theft could be a problem.

 

[AnonymousCoward]

and if most pay by cash it likely costs them more per transaction to bank the cash (and for theft) - and what about those that either don't buy or don't become repeat customers due to Amex suppression?

Cash is one of those payment methods where the marginal cost of handling an extra transaction is low. There's a high fixed cost e.g. depositing your cash at end-of-day, but that cost is the same regardless of whether you have 1 or 100 transactions.

Electronic payments have both fixed costs (terminals etc.) plus ongoing marginal costs (2.5% of every transaction, plus the chargebacks in case of fraud etc.)

Most business people aren't stupid - they can work out whether something's costing them more or not, and or whether it's costing them customers or not. Seems like they feel they can do without the Amex-only crowd.

 

[AnonymousCoward]

I'm using Paypal more and more these days with Amex as the payment method. This boggles my tiny brain though. I've had a quick scan of the costs involved for merchants accepting Paypal and they are extortionate! Yet there are nowadays a lot more retailers accepting it with no surcharge ... this can't possibly be costing them less than simply upfront accepting Amex ... surely not? I mean Amex is making their wedge with the Paypal transaction, paypal then makes their not insignificant wedge as well ... the retailer has got to be eating something like 3-4-5% or possibly even more?

The retailer just pays the one cost, right? To Paypal. Paypal probably has very good terms with Amex etc. due to volume. Paypal also handles all the "other stuff" that a business would need to pay for (any payments processor/acquirer is going to charge their own money OR you need to build your own PCI-DSS compliant system - expensive!). And lastly, chargebacks etc. become disputes between Paypal and the end user. I guess that's easier than having Amex just come in an penalise you when the customer complains.

 

[ChrisFlyer]

The retailer just pays the one cost, right? To Paypal. Paypal probably has very good terms with Amex etc. due to volume.

Yep - PayPal charges businesses the same fee regardless of which card type a customer uses, unless that customer has an overseas credit card in which case an additional 1% is added to the fee.

Low-volume merchants pay 2.6% + 30c per transaction (plus 1% for foreign customers, or 3.6% + 30c), but you can get that base fee down to as little as 1.1% + 30c (including for AMEX) if you process a lot of transactions (>$150k/month). Makes PayPal an attractive option for big businesses who are probably paying similar fees for 'card not present' Visa and MasterCard payments via their own payment gateways, with the added benefit of accepting AMEX at a lower cost.

 

[Cruiser Elite]

ie Have you noticed (or been there since they implemented it). They do now; when we were there the other week there were notes taped in the menu that there is now a surcharge on all CC. And it was charged.

I owe you an apology bc - 'Payment Processing Fee' implemented as of Sep 1, 2016. For whatever reason I was not charged the 1.75% last Thur night - maybe because I just gave Cecelia my card and the pin also so she wandered off and processed it - but last night 8 of us ate at Olive Tree and yes I paid Merch Fee 1.75 - see below.

 

[coriander]

At least OT are consistent across all cards. I wonder, though, what percentage of their business is cash - I rarely see cash tendered in restaurants these days.

 

[Cruiser Elite]

at least ot are consistent across all cards. I wonder, though, what percentage of their business is cash - i rarely see cash tendered in restaurants these days.

fyi:

Hi Handsome,

Yes – the processing fee came into effect in september 2016. Each compendium has a flyer in it explaining the charge, the eftpos terminal also confirms the fee in dollar value before the client selects their account. Sorry if it took you by surprise.

We looked long and hard at where our income was coming from, and essentially how much was being spent on merchant fees. I’m sure you can appreciate, the olive tree simply can’t absorb these costs anymore as these days we see over 90% of transactions being done by card. We contemplated increasing our prices or decreasing portions to compensate but felt that this wasn’t true to our philosophy.

Hence we partnered with First Data Merchant Solutions who act as an independent third party, providing us with merchant services. Considering data from the reserve bank shows that mc and visa cards can cost merchants more than 2% (higher for amex), we felt that 1.75% of total transaction was a fair rate. I assure you the olive tree does not profiteer from any of the processing fee.

Unfortunately there is no bypassing the charge – unless you choose to pay by other means.

We appreciate the generous tip for left for Cecilia, Steven and the gang (fyi the staff receive 100% of tips / gratis) and hope that we haven’t caused you too much embarrassment.

Please feel free to contact either Sonia or myself if you’d like to discuss this further. Or if you’d like the contact details of first data !!

Rgds

The Mostest Pretty Sister

...........................
Note: Lack of capitals in above quote is not a mistake by OT or myself as all capitals were in correct place in original email - I cannot for the life of me replace the lower case letters with capitals however I try - go figure.

 

[Chicken]

EFTPOS is not 1.75%, it's 10c per ticket. They are clearly profiting from it.

 

[coriander]

Quoting Olive Tree email ".........these days we see over 90% of transactions being done by card. We contemplated increasing our prices or decreasing portions to compensate but felt that this wasn’t true to our philosophy....."

IMHO, weasel words.

With over 90% of transactions being done by card, it surely makes sense to increase your prices by say 1.58% (90% of 1.75%).

OT's Chicken/Avo/Prawns would then rise from $29.50 to $29.97 or their other option "decreasing the portion by 1.75%" (1/3rd of an avocado less?): would anyone notice? Probably not. And the bonus would be that you wouldn't p*ss off the 90% of your customers paying by card (keeping customers happy surely should be part of your "philosophy").

Over Christmas this topic was raised as a discussion topic at an extended family dinner - everyone hated a surcharge (even a hotelier), all agreed "roll the surcharge into the fee".

 

[prozac]

IMHO, weasel words.

With over 90% of transactions being done by card, it surely makes sense to increase your prices by say 1.58% (90% of 1.75%).
...
Over Christmas this topic was raised as a discussion topic at an extended family dinner - everyone hated a surcharge (even a hotelier), all agreed "roll the surcharge into the fee".

My local (The Harbord Hilton, aka The Harbord Beach Hotel) took to charging an Amex surcharge around 2 years ago. This really peed me off so now I would eat there maybe twice a year instead of more frequently. It's a pity because I liked that I could have a few and then walk home. I wonder how many other regulars are equally peed to moderate their patronage also?
The owner says in dollar terms he saves $40k annually, but I wonder what this has done to turnover. Maybe he isn't missing me at all.

 

[Dr Ralph]

My local (The Harbord Hilton, aka The Harbord Beach Hotel) took to charging an Amex surcharge around 2 years ago.

Buy pre-paid credit cards like the Coles Mastercard with your AMEX to get around the surcharge. Assuming that there's no surcharge for Mastercard at that Hotel.

 

[fairbasa]

Buy pre-paid credit cards like the Coles Mastercard with your AMEX to get around the surcharge. Assuming that there's no surcharge for Mastercard at that Hotel.

Don't these only come in low values, like $100? If they came in $500/$1k denominations like XS cards they'd be a winner for me.

 

[Dr Ralph]

Don't these only come in low values, like $100? If they came in $500/$1k denominations like XS cards they'd be a winner for me.

Yes, $100 is common. Why is that a problem?

I bought around 45 during the last Coles Flybuys promotion. With the bonus points they came with they are cost positive for me when you take into account the points earned + the activation fee.

 

[prozac]

NSW RMS (the old RTA) apply an Amex surcharge online. My local office couldn't be bothered asking and just let it slide. Needed to renew something today and thought to phone them. Transaction went straight through with no surcharge request.

 

[N860CR]

NSW RMS (the old RTA) apply an Amex surcharge online. My local office couldn't be bothered asking and just let it slide. Needed to renew something today and thought to phone them. Transaction went straight through with no surcharge request.

I noticed that when paying my rego. Amex also call it a gov service so it gets minimal points. Would have gotten more on my MC with a lower surcharge.

 

[prozac]

I noticed that when paying my rego. Amex also call it a gov service so it gets minimal points. Would have gotten more on my MC with a lower surcharge.

I am wise to that now and paid with bank amex...

 

[prozerran]

Yes, $100 is common. Why is that a problem?

I bought around 45 during the last Coles Flybuys promotion. With the bonus points they came with they are cost positive for me when you take into account the points earned + the activation fee.

Are these prepaid credit cards fee free? - normally around $5-6 fee right?