Why online businesses can’t use American Express

American Express, AMEX, touts itself as the business credit card. They support their “members” with a policy that if you are not satisfied with your purchase you can return it and they will take the charge off your card. Many online businesses start off with MasterCard, Visa and AMEX. AMEX charges a higher fee to the merchant but that is ok if it keeps the customers and clients happy. But most end up with only Visa and MasterCard.

The issue is if you provide an online service then you are at a high risk of fraud, and I am not talking about customer fraud. If you are not shipping a physical product that you can prove was shipped and received like a receipt from FedEx or UPS then according to AMEX policy you fraudulently charged a customer and the money will be pulled from your account if a customer does a chargeback. Even with a signed contract from the customer saying that your company has the right to charge their credit card AMEX will still reverse the charges if the customer does a chargeback. The company must show physical delivery of the product. If you can not do this you are out of luck. Period.
There are many examples of online businesses and business transactions were this has taken place. For example web site design, there is no physical delivery of the website, you can’t get a receipt of deliver even if you have a site on the server to show as proof of delivery. Here are some more; Telemarketing, search engine optimization, electronic delivery of a list or software, any type of monthly subscription etc.
It amazes me that a company such as AMEX that needs merchants to survive has not grasped fundamental concepts about the internet and the electronic age and is forcing companies to stop using their service. Worse they are allowing people to steal services and products from honest companies by using the American Express credit card. Visa and MasterCard will honor a signed agreement even a “Click Wrap” agreement if the credit card cannot be entered without the agree check box being checked and the agreement read.
So if you are accepting AMEX for services or a non physical product that can not be received by shipping then consider yourself warned. Best call AMEX and review your chargeback policy with them today.

Greg Ahern
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Author: Greg Ahern

Greg Ahern Founder and President of Ometrics® is a fanatic about conversion rate optimization and AI chatbots. Greg has been a successful Internet entrepreneur since 1994. He speaks at conferences and webinars and has built a number of internet businesses. You can follow Greg on Twitter @gregahern and join his CRO Hacks Groups on Facebook and Slack. When he is not in front of a computer he can be found unplugged with his family, drawing or sculpting, endlessly learning guitar or running around in the mountains biking, climbing and skiing.