John Baymore on sat 26 jul 03
Robert,
Just because other people do it, doesn't mean it's legal. This cannot be=
stressed enough.
Dead on! =
I don't advertise that I accept Amex, and if someone asks if they can
use it to make a purchase, I generally check to see if they have some
other method of payment. I also explain why, and that's generally an
eye-opener for my customers.
Found this post after I did the other one......... see my comments ther=
e
about the cc "switch" approach.
This practice of not giving "equal billing" to the fact that you take AME=
X
over other cards is also likely prohibited =
in your merchant agreement. In fact I got "called" on it at my studio
showroom here once a number of years ago by an AMEX rep. My AMEX decal w=
as
much smaller and less prominent than the Visa and MC ones. Not
intentional........ I just didn't change all of them when I got sign
upgrades ....and I upgraded the combo VISA / MC one ...... but left the o=
ld
AMEX one. They were noticeably different in size. Some cc companies hav=
e
"scouts" that frequent thier merchant accounts to look for just such
practices.
And as far as the Amex thing goes...I accept Amex,
but only because it's the preferred card of gov't/school purchasing
departments. It not only costs me more to accept, but Amex takes
FOREVER to deposit the funds in my account. With Visa/MC, I have access
within 2 business days, often soon. Amex is more like a week.
Pertaining to the public, ..........not quite as much for corporate
cards..... I think AMEX is a lot about "image and prestige"..... and it i=
s
not just a way to make a payment. =
I tend to accept AMEX for two main reasons....... first is that having an=
y
preferred option available for a customer is simply good customer service=
. =
Second is that =
AMEX users seem to have more disposable discretionary money and make high=
er
level purchases...... and that is the desired target market for my work. =
In my experience, my tickets on AMEX average way higher than on the other=
cards I take. AMEX has plenty of demographics themselves that SHOW this.=
=
One of thier prime "selling points". This is why they can demand higher
fees and rates and terms of use.
Not to mention............ the AMEX card CAN'T have a high unpaid balance=
sitting there on it. It has to be paid off each month .
So when someone uses it, they (and you) KNOW that they have the money. =
In that sense they could have paid you cash. So they are using the card
for SOME other reason. It could be the quartetrly management reports tha=
t
a coprorate card gives..... which I find useful. But in many cases....it=
is something else.
AMEX uses the old L'Oreal haircare products approach to doing
business......... "I'm expensive and I'm worth it".
Many people use the AMEX card ..... simply BECAUSE it is an AMEX Gold Car=
d.
Or Platinum card. Whipping that card out =
to make a purchase for some people is a self defining act. Particularly =
in
a busy venue. The credit card companies push this as a marketing
point.... and dumb as it might seem to many of us........ this stuff work=
s.
It is often about status and image as much as about which card happens =
to
be on top in the wallet.
So I think it is good business practice to let the customer "strut their
stuff" . Worth the slightly higher discount rate in "customer service=
brownie points" . And with the current interest rates that I get
anymore ........ a week of extra time in the bank for me from a Visa
paymernt over a AMEX one earns very little interest anymore. In fact wh=
en
someone presents me with an AMEX Gold or PLatinum card....... I let them
know that I noticed it..... in a positive sense. That tell me that they
likely can afford a lot of my work. Getting a new customer who uses AMEX=
for me is a POSITIVE thing.
Coming back to corporate cards a bit....... I use AMEX as my main busines=
s
purchase credit card. It was a very conscious decision. I mentioned thi=
s
in another post....but they offer some great business services. That is
likely why many large schools and businesses use them. But I ALSO use it=
for my business because of creating the "positive image" thing. As what
might be considered by many in the "normal buisness world" sort of a weir=
d
and possibly suspect small business ...... sometimes it helps to "get
things done" when I hand someone an AMEX Corporate =
Gold card. Suddenly they realize that this is a legit and successful
business they are dealing with......... it wouldn't have the card if that=
weren't true. Again....it is about "market positioning".
In many ways....... all of this ties in directly with the "GOT CLAY"
discussions and the discussions about marketing and pricing and market
positioning.
best,
.......................john
John Baymore
River Bend Pottery
22 Riverbend Way
Wilton, NH 03086-5812 USA
JBaymore@compuserve.com
http://www.JohnBaymore.com
603-654-2752 (studio)
800-900-1110 (studio)
"Earth, Water, and Fire Noborigama Woodfiring Workshop: August 15-24,
2003"
John Baymore on sat 26 jul 03
Bob,
I have dealt with a number of merchants who offer a different discount fo=
r
cash or check than ccs ........and doctors who give a discount for paying=
at the
time of the offivce visit, but only with check or cash, not ccs.
<<<st
be treated as any other form of cash.
Many merchants and restaurants have minimums for ccs.
You typically can give a discount for paying cash........ you typically
can't put on a surcharge on for using a credit card.
I would suggest that you call your service provider and ask them if eithe=
r
of these approaches is permitted in your particular contract. My guess i=
s
that they will say "no" to the latter. Having reviewed many service
providers contracts when I was looking at providers.......... they ALL h=
ad
those exact same stipulations. =
Another one that can get you in trouble is if a customer presents an AMEX=
card for a purchase and you then ask them if they have a Visa or MC....
because WE know that the discount rate on AMEX tends to be a tad higher. =
If they complain....... you likely have a big problem with AMEX.
I am not saying this stuff doesn't HAPPEN.... people do illegal stuff all=
the time. What I am saying is that it is not typically permitted by most=
merchant's service providers. If a customer complains to thier cc
carrier....... the merchant can lose the account. Once you have lost a
merchant account for such reasons... you will have a devil of a time
getting another one. And if you do.....your discount rates typically wil=
l
be higher.
The best thing for anybody who has a merchant account is to either READ t=
he
documents you already signed........ or call the provider and ask about i=
t.
best,
.....................john
John Baymore
River Bend Pottery
22 Riverbend Way
Wilton, NH 03086-5812 USA
JBaymore@compuserve.com
http://www.JohnBaymore.com
603-654-2752 (studio)
800-900-1110 (studio)
"Earth, Water, and Fire Noborigama Woodfiring Workshop: August 15-24,
2003"
Robert Van Rens on sat 26 jul 03
John,
" Found this post after I did the other one......... see my comments
there
about the cc "switch" approach.
This practice of not giving "equal billing" to the fact that you take
AMEX
over other cards is also likely prohibited
in your merchant agreement. In fact I got "called" on it at my studio
showroom here once a number of years ago by an AMEX rep. My AMEX decal
was
much smaller and less prominent than the Visa and MC ones. Not
intentional........ I just didn't change all of them when I got sign
upgrades ....and I upgraded the combo VISA / MC one ...... but left the
old
AMEX one. They were noticeably different in size. Some cc companies
have
"scouts" that frequent thier merchant accounts to look for just such
practices."
I read my contract thoroughly before I signed, and read it again to
check this point. I accept credit cards through a secondary merchant
bank that offers other services (such as a discount on my security
system contract). Noplace in the contract, which is many pages long,
does it mention what you describe as "equal billing", that is to say,
maintaining a sign for Visa/MC/Disc/Amex all the same size, prominence,
etc.
Now, I don't HIDE the Amex display; it's right there on the door by the
others, plus a host of POS stickers. But many customers walk right up
to the counter and ask "You take credit cards?" "Yep." "OK. You take
checks?" "Long as they're good." This usually stops them for a second,
but generally they chuckle and move on to purchase something.
We also probably have a rather different customer base, and different
purchasing needs. Most of my retail customers are potters; not exactly
the most affluent crowd. In fact, ATM/Debit/Check cards are the most
common method of payment in my store. The gallery is somewhat
different; many of our customers are local (meaning semi-rural
working-class), and there's just not a lot of AMEX Gold Cards there.
The visitors who do have money, usually rich tourons on the way out to
the mountains, check the decals at the door and KNOW that I accept Amex.
They don't ask, just put it down on the counter. I don't argue, just
take the card.
It's a rather subtle shading of meaning. I don't aggressively
discourage acceptance of AMEX, but I do indicate, if asked, my
preference. Many galleries and small retailers around here do not
accept AMEX because of the types of issues.
As far as funds availability, I am not too interested in interest earned
on money from such purchases. What I AM interested in is having the
cash available to me soon; my business is small, and relatively new. I
purchase a little on credit as possible, partly because I haven't
established multi-year purchasing histories necessary for large credit
orders, and partly because I prefer to pay in advance, or on delivery.
It gives me some legal leverage when a supplier drops the ball (which
happens FREQUENTLY). Point is, if I have the funds available, I can
order more merchandise, sell more, etc. Eventually, I will have enough
of a "slush" that this becomes less of a problem, but in the meantime I
am practicing a particularly austere version of cash flow management.
You have an excellent point as to how this relates to marketing, though.
My biggest issue is that AMEX is determined to keep merchants and
purchasers at odds with one another. VISA/MC/Disc seem to be more
interested in facilitating purchases on both sides. It bothers me that
AMEX stresses the "status" gained from using the card, and then turns
around and screws the merchant.
Rob Van Rens
Frederick Clay Art Center
5400 Yukon Place, Unit 500
Frederick, MD 21703
(301) 676-9339
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