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Michael View

Charge and be charged!

15 November 2010

The Amex surcharge, sometimes up to 3%, is something that really aggravates me as a customer, and I‘m not alone, I‘ve seen countless numbers of staff abused by customers because of this.

Once the exclusive realm of the rich or well-travelled businessperson, American Express is a credit card with a challenge in Australia ‘" use it and in many establishments, you get charged a fee. So why is this?

Short sighted shopkeepers, hotel chains and restauranteurs seem to think it gives them a bit extra margin (because they certainly charge more than the difference between the Amex fee and the bank backed cards).

Bargaineering.com hosted a forum started by a member titled: ‘Why do merchants dislike American Express?‘

An reply from Blaire Moore stated that: ‘There are a few reasons.
First and foremost, most people have a Visa card, and if they don‘t then they have a Mastercard. Both cards are processed on the same network.‘

Therefore if you are a business you only need one merchant account, which means Visa and Mastercards are cheaper to accept. This is the short sighted approach.

Scott Sanders disputes the above argument. As he argues, ‘A savvy merchant will understand….and appreciate the economics.‘

According to Sanders, An American Express customer might enter a store, browse for 45 minutes, talk to some of the staff and leave after spending $400. The profit for the retailer after a 2.75% Amex fee ($11.00) is $389, probably $294.50 as a net transaction.

A typical Visa customer may enter the store, spend the same amount of time and finally spend $150. The retailer pays Visa 2% ($3) and makes a $147 profit, probably $73.50 as a net transaction.

So, obviously Amex customers are harassed through ignorance without retailers understanding how important these clients really are.

Perhaps establishments should consider adding the surcharge into prices. This would make Amex customers happy and leave many innocent staff relieved at not copping it for something they they can‘t change.

What do you think? What annoys you most as a business customer?

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