Let me start off by saying that I like the conveniences of being an American Express cardholder, but as a merchant, it can be frustrating at times. Here are the popular reasons I hear when other small business owners tell me they won’t take AMEX.
Reason #1 – Chargebacks
At a previous business, I once had a customer who used our software for over a year and was paying us software licensing fees in excess of $1,000 per month. When the customer filed for bankruptcy and his business shut down, he called AMEX and claimed that all charges to his credit card from our company – going back months – were all fraudulent.
AMEX immediately reached into our bank account and froze the funds… nearly ten thousand dollars. For a small business, this was a significant amount of our working capital to be taken out of our account. We had to fight for weeks and show the AMEX arbitrator that these were legitimate charges.