I've seen that since being a kid. In my experience, businesses that refuse Amex are either great enough to be comfortable rejecting customers and mostly good faith, or mediocre to bad and not worth patronizing.
"The retailer has essentially no power to avoid this, as long as the card issuer's take remains below the point at which it would be unprofitable to service their pool of customers."
AMEX is really on the brink of this point currently in the US. A lot of places simply do not accept AMEX and a lot of AMEX customers carry different cards because of that. Since merchants know that the average AMEX customer usually carries another card as well they are often ok with not accepting AMEX.
Currently the main selling point of AMEX are rich people that swear by their black amex card and are really annoyed when somebody makes them take out their lowly visa. So places that cater to rich people or hope to cater to rich people usually try to take the hit and accept AMEX.
While I agree with some of your points here, you are ignoring that an Amex user does not have a second card based method of purchase.
I would assume that most Amex users always have another method of payment, considering how likely they are to run into a situation where Amex is not accepted.
With this logic, the business will only lose revenue from customers whose only form of payment is Amex - I think this would be a small subset.
I've been finding Fewer and fewer places that accept Amex. Sometimes when you hand over an Amex they'll give you a look since you're costing them money. If hey really want to compete they need to lower their merchant rates.
Really? I only have an AMEX card and unless it's a chain store it's almost never accepted. I often get lectures from small business owners about the higher rates charged by AMEX and why they can't accept it.
Competition with MasterCard, Discover, and Amex should hold them back from doing this, because at such punitive rates merchants would definitely stop accepting them.
There's little incentive to change. Retailers also know their clients who use Amex, are aware how little it is accepted and are likely to have a backup alternative they can just use.
I usually pay with Amex and sometimes a business will say "Oh sorry, we don't take Amex". Never once have they ushered me out the door and issued a trespass notice. Instead I just pay another way and we are both happy. That seems pretty optimal.
Exactly. Amex has become almost worthless in the US for me because most retailers don't accept it. (When I've asked them why, they say the fees are too high and Amex takes too long to pay them.) Amex still works for airlines and hotels, but not much else.
I'm an Amex user who has a second card in my wallet, but I avoid giving business to stores that don't take Amex. I feel like it's a sign that they don't understand me, and don't want my business.
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