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From: andrew@orca.UUCP (Andrew Klossner)
Newsgroups: net.consumers
Subject: Re: Amex card fees
Message-ID: <1605@orca.UUCP>
Date: Tue, 9-Jul-85 14:17:50 EDT
Article-I.D.: orca.1605
Posted: Tue Jul  9 14:17:50 1985
Date-Received: Thu, 11-Jul-85 20:25:03 EDT
References: <489@grkermi.UUCP> <3950@alice.UUCP>
Organization: Tektronix, Wilsonville OR
Lines: 42

[]

	"4. A lot of places that do take it do so only grudgingly,
	because they normally charge the merchant much more than
	MC/VISA."

I operated a mail order software house for a few years, and have some
experience with credit cards from the merchant's viewpoint.

Mastercard and Visa normally charge the merchant 3% of each
transaction.  (They charge me 2.5%, because I take only large orders,
nothing under $95.)  This happens immediately, not at the end of the
month; when you deposit your credit card slips (in a process much like
depositing checks), you subtract 3% off the top and that's the amount
of your deposit.  Bear this in mind next time your bank tells you they
need to charge you for having a card; they make much more from the
merchant than from the consumer.

American Express charges 4%.  The difference between 3% and 4% isn't
enough for a merchant to get bothered about, especially since you're
less likely to have an AmEx charge go bad than a Visa/Mastercard
charge.  AmEx REQUIRES that you get the customer's signature, hence no
AmEx telephone orders.  Visa/Mastercard don't require this, but, if you
don't have the signature, they can refuse to pay the charge (by
debiting your bank account) without justification, and the merchant has
no recourse.  Also, if the charge is more than $50, the consumer can
challenge the charge even if the merchant got a signature.

What pisses off the merchants is that AmEx tells you how to run your
business.  Specifically, you MUST put the AmEx new-customer
solicitation display (a cardboard sign and several application forms)
at each cashier station, and you MUST get AmEx approval of each print
advertisement before publication if it specifies that the consumer can
charge a mail order to AmEx.  This advertisement MUST include a large
clip-out coupon with individual blocks for each of the several digits
of an AmEx card, and the coupon MUST be of a certain minimum size.
This is why I didn't go through with the AmEx merchant sign-up; the
cost of buying the space for an AmEx coupon in a single Byte ad is
literally over a thousand dollars.

  -=- Andrew Klossner   (decvax!tektronix!orca!andrew)       [UUCP]
                        (orca!andrew.tektronix@csnet-relay)  [ARPA]