Never Refuse a Customer’s Preferred Method of Payment

Paul Sisolak recently wrote an article over at GoBankingRates.com titled “Why Aren’t American Express and Discover Cards Accepted Everywhere?“, where he laid out reasons why merchants may be refusing to accept the two cards. Higher merchant credit card processing fees may be the number one reason why the two cards are not accepted by some merchants.

So this leads to the question, is saving a few extra dollars by not accepting American Express and Discover worth the aggravation that the customer may experience when his or her preferred method of payment is refused?

Customers want to use these cards because of the many perks and rewards that they receive. Cash back, hotels, gift cards, electronics, etc are just some of the offerings that you may receive if you are a card holder or member. American Express tries to lure the consumer looking for a bit of luxury with membership benefits that offer access to VIP airport lounges, top tier hotel programs and exclusive membership rewards. Of course these benefits do come at a cost to the cardholder with some cards incurring an annual fee as high as $500.

A credit card, whether it is Visa, MasterCard, American Express or Discover, allows a customer to make spur-of-the-moment purchases, pay for an item over time if cash is not readily available and eliminates the need to carry cash. According to a survey conducted by MasterCard three out of four Americans use less cash today than they did 10 years ago. This shift indicates that consumers are most likely carrying more cards for regular everyday purchases and most consumers will choose the card that gives them the most benefits and fits with their lifestyle.

If your business operates in a category where a higher percentage of its credit card transactions come from American Express or Discover, not accepting these cards for purchases could mean eliminating sales and customer loyalty. According to Card Hub, American Express accounts for 24 percent of total credit card transactions in the US.

American Express’ new OnePoint program solves many of the problems merchant’s experienced accepting their cards. From delayed deposits to separate monthly statements, the OnePoint program is a great solution. Faster settlement, including next day deposits, one ACH for all cards, a single source for customer service and no cost of entry in the program are some of the key benefits of the program.

Below are factors you may want to consider before eliminating American Express or Discover as payment options for your customers.

Discover Card:

• 78% of consumers with a rewards card use it as their primary card (source, Cardbeat, 2011)
• 51% of Discover primary cardmembers have not returned to a merchant where their card was rejected. (source, C & R Research 2011)
• 5,000 new merchants join Discover daily. (source, Discover)
• 33% of Discover primary cardmembers whose card was rejected have a lower opinion of the merchant. (source, C & R Research, 2011)

American Express:

• *They spend on average 37% more than members of all other card brands.
• *Amex transactions are over 70% higher than average non-Amex transactions.
• *89% say they are enrolled in an Amex loyalty program.
• *72% say they are more likely to return to a merchant if Amex is accepted.
• *65% of Amex corporate or business card users say Amex is preferred or required by their companies for business expenses.
• For the sixth consecutive year, Amex has ranked highest in customer satisfaction. (http://about.americanexpress.com/news/pr/2012/amex-ranks-highest-customer-satisfaction.aspx)

*Information was gathered during an internet panel survey conducted in July 2011 by Brookfield Research, commissioned by American Express.