This isn’t an SEO post, but I have to go on a rant here because, well, I am blown away that companies continue to be “short sighted” even in a recession.
I went to upgrade my Pandora subscription (online streaming music) so it would be ad-free only to discover that they dont’ take the American Express card. Seriously? In this economy you are going to have a barrier to entry? Make doing business with you difficult? Unreal.
Why is this a big deal? For starters, unlike many Americans, I only use one credit card. I would rather not have the temptation of having many cards and getting into debt. No thank you. It is a personal choice. However, I am also a business owner and I want to make it easy for my customers to do business with me.
Allow me to illustrate …
We all have commercials that we hate. The ones I hate the most are those awful Visa commercials. You know the ones, that feature restaurants, resorts and other places that brag up these places and they end up by stating, “They don’t take American Express.”
Many people who run their own businesses and don’t take the American Express card do so because of the higher fees that AMEX charges. The higher fees are harsh, but you are, in fact, reducing the number of ways a customer can buy from you. American Express has a super strong membership, myself included. In fact, American Express members often only carry one credit card – their AMEX.
If a customer comes across a barrier to buy, more often than not, they go somewhere else, or decide not to buy altogether. Now, if AMEX charges an extra 1% over the other cards and as a business owner, you make a sale of $5,000.00, that is an extra $50.00 you will shell out to American Express. Is it worth it? It is when you look at it from the other side.
When my wife and I got married in 2002, we planned a week long cruise for our honeymoon. At the end of the buying process, the cruise line I picked out said they didn’t take American Express and asked for another card. “That is the only card I use.” They didn’t save $50.00 by not taking American Express; they lost $5,000.00 as I went with another cruise line.
Not accepting the American Express card is just dumb. Bragging about it is even dumber. Don’t be dumb. Let people buy. Period.
Scott says
As a former retail store owner, I wish AMEX was just 1% over Visa/MC. After all of the fees it was more like 2%, unless it was a business AMEX which could add 1-2% (depending on how it was processed). I personally don’t handle AMEX or worse yet Discover in my current business. I have never had a client not immediately pull out another card.
Personally, I haven’t had an AMEX account in 2 1/2 years and no credit cards at all for over 1 year. I too have no intentions of getting back into debt.
linklanka.com says
Good thing your not a loyal DISCOVER CARD holder or you would be pissed off everywhere you went.
Jerry West says
Ha. Good one about the Discover card. Isn’t the Discover card like that annoying kid in grade school that had the pool? You couldn’t stand him all year and then you sucked up to him before school let out, went to his pool once and realized it wasn’t worth it and never went back.
Scott: I would contact AMEX and get a better rate, all you have to do it ask. My rate is less than 1% above Visa/MC.
Rick says
Jerry,
I am with you on this one. As a business owner I did not like taking AMEX or Discover because of the higher rate, but I knew that I would be turning business away. I have backed out of fast food drive thru’s when I realized I only had a check book on me. (I know – I am the only guy who still carries a check book).
If a business owner uses this logic to rationalize not taking AMEX or Discover, well then why do they take credit cards at all? Why not cash only? There is no fee on taking cash. Same logic!
Jerry West says
Hey Rick,
Good points. I don’t take Discover, just because it has very little to no market share and people who use Discover have a lower average ticket than the other three majors, whereas AMEX has the highest. You can call AMEX and get a lower rate. I just got pissed last night when I was all set up upgrade and couldn’t. I only thought small companies made stupid mistakes like this. :-)
Gene Pybus says
As a result of the CARD Act reforms that went into effect on February 22, credit card companies are projected to incur $12 billion in annual losses. But we all know that credit card companies are far too imaginative to let this happen. The reforms require the credit card companies to give you 45 days notice before rate increases, and those increases cannot be applied to existing debt unless you miss payments for 60 days. In addition, there have been new restrictions placed on how they can market to college students under 21 years old. This all translates to nothing more than a bump in the road for card companies. Old methods of revenue generation will be replace by new ones in the form of lots of fee?s. Best bet is to clear your debts and watch your statements for any suspicious changes.