Many merchants won’t accept American Express due to the higher discount rate they charge. They do this in an attempt to save money. I believe they actually could be costing themselves money. Possibly a lot of money! Here are my top four reasons to accept American Express:
1. Impulse buying. The more options you offer your customers the more likely they are to buy. You don’t want a customer to go to your competitor because they accept American Express and you don’t.
2. You may lose a repeat customer. Refusing a sale because it costs slightly more doesn’t save you money. The customer may no longer be buying from you, he may be buying from a competitor.
3. Studies have shown that American Express cardholders spent 2.6 times as much on retail Internet purchases in the past 6 months using an American Express Card as Non-Card members spent on retail Internet purchases in the past 6 months using Visa or MasterCard. (Source: Brookfield Research)
As long as your profit margins are higher than the discount rate, you should always be making money and gaining new customers by accepting American Express. Rates vary by business type but are generally around 3%.
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