AMEX not accepted or surcharge

[serfty]

Did we mention somewhere that Downtown Duty Free recently introduced a surcharge of 2% when paying by Amex?

I have just purchased duty free from BNE airport Downtown Duty Free, paid with Amex and was surprised that no surcharge was applied to the bill.

I am sure I paid surcharge in April.

I received an Amex statement yesterday. It had a flyer inside called "INSIDER". In it I found the following on page 3:

Use you Card at Downtown Duty Free at no extra cost
One of the best things about travelling just got better. Downtown Duty Free are now warmly welcoming your American Express Card without a surcharge. ...

Also noted nearby is the facility to redeem Mebership Rewards points for DtDF Gift Vouchers. So it appears Amex and DtDF have come to some agreement. (BTW a $50 DtDF voucher for 7,000 MR points is not really impressive IMO)

 

[NYCguy]

Re: AMEX not accepted or surchage

I recently got an email from Amex, informing me that Telstra now charges Amex customers the same surcharge rate as Visa or Mastercard holders. Only those using Diners now pay a higher surcharge.

It is undoubtedly pressure from Cardholders that drives this sort of change. Cardholders have to tell merchants that they are disappointed that they either can't use their card, or are being charged an extra fee for having the audacity to use it. Also, inform Amex and let them do some lobbying on cardholder's behalf.

 

[one9]

Re: AMEX not accepted or surchage

It is undoubtedly pressure from Cardholders that drives this sort of change. Cardholders have to tell merchants that they are disappointed that they either can't use their card, or are being charged an extra fee for having the audacity to use it. Also, inform Amex and let them do some lobbying on cardholder's behalf.

It is great for the Merchant when this happens. But unfortunately it is only for high visibility merchants.

When a merchant like Telstra adds a higher surcharge, and then Amex will offer the merchant a heavily discounted/subsidised merchant fee for a period of time.

So both the merchant and consumer will win.

But realistically, this only happens for high visibility merchants as Amex knows that many people know about them and it affects how many people sign up for Amex cards. Amex wants there to be a perception of high acceptance.

If Joe the local Builder, or Anna the local fruit shop, put on a surcharge, Amex wouldn't care.

But I must say that Amex is doing a great job to improve Amex acceptance at large establishments. Whilst I think some merchants may manipulate this (eg. Duty free introduces a surcharge knowing that Amex will most likely offer them a reduced surcharge), it woulds out very well for Amex cardholders.

 

[fasteddie]

Re: AMEX not accepted or surchage

....a sale is a sale. I dont understand why so many merchants dont accept Amex.

It depends so much on the specific circumstances of the business.

In my case I was offered an Amex Merchant Service Fee around 6%, the gross margin (before business overheads) averaged only about 40%, demand was relatively price sensitive and most Amex Cardholders had alternate Cards or Cash. Few of our competitors accepted Amex. The decision was quite easy - I didn't bother either.

We had signs and flyers around advising on the policy. Got a few enquiries and comments but don't believe we ever lost a sale. In fact the only pair to ever walk out after declining an Amex sale (we discovered later) was Amex' own goons doing a "shadow shop" on us.

 

[rhjames]

Re: AMEX not accepted or surchage

Only just noticed this thread. I don't know why I have used AMEX for the past 30 years. I am fed up with travelling and occasionally finding that the card is not accepted because their fees are too high. I also carry visa as backup, and try to use Amex for business expense only.

I'd prefer them to drop all the insurance, travel perks, expensive mail outs, and just be a credit card. I'm insulted when they try to get me to take up offers of loans with low interest of only 11%, or special cards with similar low interest. It's like calling me stupid. No-one with any common sense would use these loans, or pay interest on a credit card except in extreme circumstances.

Now that I'm prompted, I'll probably change to a more readily accepted card.

 

[ozstamps]

Re: AMEX not accepted or surchage

It depends so much on the specific circumstances of the business.

In my case I was offered an Amex Merchant Service Fee around 6%

The real world merchant fee, even for small business, is well under half that rate. Trust me.

 

[one9]

Re: AMEX not accepted or surchage

The real world merchant fee, even for small business, is well under half that rate. Trust me.

I would not say "well" under half. Most merchant fees for Amex are in the 2.5% to 3% range.

I have heard of significantly higher merchant fees for (a) high risk industrires (b) merchants who process a lot of very low value transactions.

 

[fasteddie]

Re: AMEX not accepted or surchage

To settle this debate, I will refer once again to the graph that I posted here a few weeks ago:

These are "official" RBA statistics, albeit I have yet to find the more up-to-date ones.

Ozstamps is correct in pointing out that Amex offers merchant rates well below 6% - in fact the average is probably less than 2.5%. But you also need to consider that the distribution curve will be heavily skewed at the lower end - there will be a high proportion of transactions through the large retail chains enjoying their 1% (or less) merchant fee, whilst those in the wrong industry pay VERY HIGH merchant fees.

The bottom line is that an Amex transaction is likely to cost the Merchant about DOUBLE a Bankcard/Mastercard/Visa transaction.

I was offered (and declined) the 6% Amex Merchant facility, whilst my own Bank charged 3% - which was later reduced to 2.7%.

 

[oz_mark]

Re: AMEX not accepted or surchage

It's an interesting chart, as it shows that Diners Club on average charges lower merchant fees than Amex. Anecdotal evidence would suggest the exact opposite.

 

[fasteddie]

Re: AMEX not accepted or surchage

....it shows that Diners Club on average charges lower merchant fees than Amex. Anecdotal evidence would suggest the exact opposite.

Agreed, but that's probably another issue outside the scope of this thread.

The difficulty is that neither company would readily disclose which merchants are paying what rate.

What I found outrageous with Amex was that they insisted on an Extended Recourse Amendment to the Agreement (see attachment) as well as their 6% cut. In other words, the Merchant was paying a very heavy premium for a cr_p service - and being left with the credit risk on the transaction. :evil:

 

[one9]

Re: AMEX not accepted or surchage

Agreed, but that's probabaly another issue outside the scope of this thread.

The difficulty is that neither company would readily disclose which merchants are paying what rate.

What I found outrageous with Amex was that they insisted on an Extended Recourse Amendment to the Agreement (see attachment) as well as their 6% cut. In other words, the Merchant was paying a very heavy premium for a cr_p service - and being left with the credit risk on the transaction. :evil:

May you let us know what industry you are in?

 

[fasteddie]

Re: AMEX not accepted or surchage

one9, I don't know if it's really relevant but I managed a Licenced Brothel/Escort Agency for 5 years.

It's been several years since I got out, but my understanding is that Amex still insist that all Operators in this industry must sign this insidious document before they are given the privilege of becoming an Amex merchant.

It caused great problems in the industry. Those few operators accepting Amex often had an automatic chargeback applied simply by the Cardholder querying the transaction. Common scenario: Wife opens the Credit Card Statement. Husband denies the transaction and rings Amex to deny liability.

By the way, I strongly discourage anybody from trying this themselves. It is fraudulent and can land you in jail!

Also, it is possible that Amex have discontinued this practice, but I doubt it. Up until recently, rather than fix the problem and change their policies they preferred to keep the scam under wraps and if you made a fuss you were more likely to get charged with "Incitement".

I won't mention the Bank, but our Standard Credit Card and EFTPOS facilities had a high turnover (volume and transaction numbers) and ran flawlessly for the 5 years.

 

[one9]

Re: AMEX not accepted or surchage

one9, I don't know if it's really relevant but I managed a Licenced Brothel/Escort Agency for 5 years.

It's been several years since I got out, but my understanding is that Amex still insist that all Operators in this industry must sign this insidious document before they are given the privilege of becoming an Amex merchant.

It caused great problems in the industry. Those few operators accepting Amex often had an automatic chargeback applied simply by the Cardholder querying the transaction. Common scenario: Wife opens the Credit Card Statement. Husband denies the transaction and rings Amex to deny liability.

By the way, I strongly discourage anybody from trying this themselves. It is fraudulent and can land you in jail!

Also, it is possible that Amex have discontinued this practice, but I doubt it. Up until recently, rather than fix the problem and change their policies they preferred to keep the scam under wraps and if you made a fuss you were more likely to get charged with "Incitement".

I won't mention the Bank, but our Standard Credit Card and EFTPOS facilities had a high turnover (volume and transaction numbers) and ran flawlessly for the 5 years.

Thanks for letting us know the industry.

Your post strengthens my belief that Amex are not a very ethical company.

Amex should either (a) not provide merchant services to someone or (b) provide them fairly.

I believe Amex are a company who change rules, introduce new rules etc, rather than thinking about what is fair. I have little trust in Amex and believe that something similar to the Banking Code needs to be introduced for credit card companies.

 

[ozstamps]

Your post strengthens my belief that Amex are not a very ethical company.

I have been an Amex card holder and merchant over 25 years and find them superb in all aspects of customer service.

Just my 2c and have had an awful lot to do with them on both fronts.

Amex MR is IMHO the ony game in town. All my US purchases (which are many, and often expensive) do not rape me the 2% and 2.5% surcharge that oz bankcards do either.

 

[fasteddie]

Re: AMEX not accepted or surchage

ozstamps, I have no doubt your experience with them has been a positive one. Nor that they have thousands, or even millions (worldwide) of happy and loyal customers - otherwise they would not have survived this long.

Getting back to the main theme in this thread, your point does however highlight the main underlying problem with American Express:

There are two types of Amex customers:
(a) those that it values and nurtures
(b) those that get a raw deal

Too bad if you don't meet their criteria for (a)

The company has it's own standards and values, and will apply them at their own discretion. Problems with merchant acceptance of the card are primarily a result of their own arrogance.

 

[imbruce]

Re: AMEX not accepted or surchage

there was a comment earlier about Amex charging late fees, and no other bank does this, Commonwealth Visa charge a late fee of $25 one problem with Commonwealth is they don't have a fixed due by date where as Amex does which just makes it easier when you know the fixed date, also if you call Amex customer services they will reverse the late fee if you have not had one in the last 12 months, also be careful as Amex will change your interest rate to a higher rate if you are frequently late.Also more people need to complain to RBA and Fair trading about the surcharge and other fees don't accept them as they are. I am living in London at present and there was a lot of complaints about the fees being unfair we were until 6 months ago charged £30 (equiv to $72) for late fees now £12 also £30 for a dishonored direct debit/bounced chq. A lot of people are now claiming the fees back and are able to do this for the past 6 years of fees and charges threatening to go to small claims court, the banks and credit card companies are backing down and refunding the fees although some bank are closing the accounts after they have paid you.It just takes people power to achieve this.

 

[bambbbam2]

Re: AMEX not accepted or surchage

Yet more reasons why I refuse to allow direct debit unless absolutely unavoidable. *I* choose when to pay my bills, not the other way round.

 

[rhjames]

Re: AMEX not accepted or surchage

I always carry Amex and visa. I've never had a problem with visa in any country, but I can never be sure when Amex will not be accepted or cop a surcharge. For overseas, I'm swinging more towards cash these days - plenty of ATM, and less charges on the transaction. Of course, I never pay interest on a credit card, so this isn't an issue. FF points are all very nice, but I seem to accumulate them faster than I want to use them. I find I'm moving back towards cash these days - less charges, particularly when overseas - plenty of ATM so pretty easy. It's my little private protest - I'm sick if these card people treating me like a fool - eg offering me new cards with only 16% interest!!!

 

[nlagalle]

Re: AMEX not accepted or surchage

I'm not sure if it has been mentioned in the last 18 pages (didn't wade through it all) but the main reason why merchants whack an extra surcharge on AMEX cards is normally the Merchant charge.

Generally Amex is over 4%. And before the Amex CC came out and there was only the charge cards, this was there only revenue for AMEX as there is no interest to pay on a charge card. Now this has changed somewhat with the credit cards appearing. some places have gotten a lower merchant charge, but nothing like VISA/Mastercard, which even an upstart business can get it for about 1.6% many large businesses have a merchant charge of less than 0.7% for V/MC. EFTPOS is generally 20c up to $1000 in a transaction.

And all the major banks charge late payment fees. I know NAB charges $35 and ANZ $30 as I have been stung in the past.

So for a smaller business Amex can be a sting for CC transactions if you don't have that pricing built in.

Nick

 

[aasz1978]

Re: AMEX not accepted or surchage

In my opinion,

AMEX has a very good currency conversion rate. I tested this when I went overseas and used BOTH Visa and AMEX at the same day. I noted the T/T rate of the day on the local newspaper because that's how all O/S purchases should be converted at.

Result? Even after Conversion Commission, AMEX came out much better than VISA.

Their cust serv is also ok in my opinion but their late charge policy is really crazy. One missed payment and not only you'll get $30 late fee, interest backdated since day 1 (ie: 55 days) as if you never benefited from that 55 days interest free days.

To my understanding, AMEX merchant fees charges 3% vs 1.5-2% for VISA but seriously, as a cardholder, I'd prefer AMEX.

But about 50% of my purchases now are non-AMEX because the merchant doesn't like it. It used to be only 25%.

There should be a list on which vendor doesn't provide AMEX payment so I can avoid the embarrassment of handing out the card only to be told it is not accepted.