To think the new AMEX advert actually hurts small shops rather than helping them?

[WeBuiltThisBuffetOnSausageRoll]

It annoys me every time it's on - their claim that they're supporting small independent shops by encouraging people to shop there instead of the big chain stores.

Firstly, I didn't know that anywhere actually accepted American Express, presumably because they've always been rumoured to charge a significantly higher-percentage merchant's fee than Visa and MasterCard - although this might have changed as I don't recall seeing an "All credit cards accepted except AMEX" sign for quite a long time.

Secondly, I'm not convinced that many people will be persuaded to switch as those who prefer using the big shops tend to do so for a reason (convenience, opening hours, parking, household brands, bigger range, slightly lower prices etc.) and are unlikely to change their long-standing shopping preferences.

I rather suspect that this is aimed at people who already use small shops on a regular basis, but usually pay by cash or debit card; and that sowing the seed of the message that using AMEX 'supports' small shops will make them instead pay by AMEX - and thus cost the shopkeeper a bigger portion of his/her profits - or, if the shop doesn't accept it, complain in their numbers and harass the shop in to considering doing so - which will ultimately hurt them in the long term and/or cause them to have to increase their prices to allow for the reduced margins and therefore put them at an even bigger disadvantage when compared to the superstores.

AIBU or is my cynicism possibly at least slightly justified?

One of the business I do work for, the owner pays suppliers by Amex to get the air miles, he then transfers the money into his personal account to pay Amex, problem being he doesn't tell me which suppliers he has paid, then forgets, I have a nightmare trying to work it all out

I’ve got two, one for business and one for personal spends. The reward points scheme is actually pretty decent.

They do charge retailers a slightly higher percentage compared to MasterCard / Visa, but it’s not a lot. Not enough to force shops to put their prices up as you think.

I have two Amex cards, one charge and one credit card. I find them way superior than any of my other cards - but then, I live in London, work in the City (so accepted pretty much everywhere here) and always pay them off in full every month.

From the points on my everyday spending I upgrade all my leisure flights to business/first, get lounge access, pre-sale for e.g. National Theatre tickets, etc. I've paid for a week of hotels using just the points, taking advantage of a transfer offer. Plus, if you need to call customer services there is a person from the UK on the other line, not (obviously) reading from a script.

(But yes - it's not accepted everywhere so you do need to carry a back-up at all times, which is annoying)

When I was traveling a lot I had a gold amex (free for the first year) which gave me free travel insurance, priority club with some car hire places, and free entry to business lounges in airports (air Alaska have unlimited free waffles in their lounges!) I used to call up to cancel my card every year and then apply for a new one.

But as I don't travel for work anymore I didn't bother getting a new one after the last one. It was good to have a separate card just for travel/work related expenses I suppose.
Their customer service was always great when I called to cancel, they never tried the hard sell, as long as the balance was paid off the excuse of "I don't want to pay after the free year" was always fine. (Unlike every mobile phone company who have a "but why" department!)

Our card machine provider is has a 5% Amex charge, whilst all other card payment methods run at 1.5% or less. The % varies between provider and the contract you are on.

As a business why would you accept paying a 5% charge when other payment methods cost you so much less? It is illogical.

Amex high charges pay for their customers perks, that's their business decision. It works for them.

Our business decision is to not accept Amex. It works for us.

Every small shop info in seems to want me to spend at least £5 or £10 to use my card.
Tesco.dont care if I only want a pint of milk, so I go there.

My old workplace was charged 50p for spends under £5, 2% for spends over and 24% was the quote to take Amex. So we had a minimum spend of £5 on card and no Amex. It was a small independent charity so we couldn’t really ‘suck it up and absorb’ the costs of Amex transactions

(Off-topic) My local bookshop is in the Visa advert the owner is lovely and I highly recommend!

Can someone tell me... who has an Amex?? Why would you, it is not accepted in a lot of places?
Genuinely wondering, maybe I am missing something...

Loads of places take Amex. As PP said it's for the points.

I put pretty much everything on the Amex instead of a debit card because of the points - the rewards are brilliant. I had an MBNA Amex for a few years which did general rewards to be redeemed across a range of retailers as well as travel: I put several rounds of IVF, as well as the saved card for all Ocado, Amazon, Netflix etc payments, Apple pay, and general day to day transactions on Amex and accrued well over a thousand quid worth of points over a few years: got a new top of the range telly and some furnishings, as well as lots of air miles.

There's the odd place that doesn't take Amex but the vast majority do in my experience (I'm in central London though). My MBNA account was handy in that the Amex and visa were on the same account, you could just use the visa anywhere that didn't take Amex. (they've stopped offering Amex so now I have the standard BA Amex for Avios.

I'd flip the question back and ask why would I not have an Amex and just use a Visa or Mastercard, when the rewards are so much better

Every small shop info in seems to want me to spend at least £5 or £10 to use my card.
Tesco.dont care if I only want a pint of milk, so I go there.

By all means do that if it works better for you, but the small shops aren't doing it to be awkward - they don't have a lot of choice if they want to stay in business.

The majority of people in Tesco don't just buy a pint of milk. The chances are that they will make a loss (or at most break even) on that pint of milk if you pay by card; and for those who do this (not saying they shouldn't - I've done it before on occasion in supermarkets), they will have hundreds of other shoppers with a great big trolley-load to balance it out.

Your local corner shop will probably have an average spend per person per visit of a tenner at the very most, with many just buying a pint of milk, loaf of bread or a newspaper, so they have very few big spenders to mitigate the losses (or virtually no profit) that they would make on the vast majority of transactions if they accepted cards for a £1 sale.

Also, because of their enormous volume of card transactions, across hundreds of stores, Tesco and the other big boys can negotiate a much lower fee with the card issuing companies. Tiny independents are unable to do this - plus the cost of the equipment will work out to much more per transaction.

Basically, the little guys need Visa/AMEX etc., who couldn't care less if they lost one corner shop's business; whereas, for Tesco, the opposite is the case and if one or more supermarkets suddenly refused to accept one of the card issuers, the card company's profits would take a huge hit as people switched to a competitor for their regular supermarket - and thus all other - shopping.

Having said that, even cash can cause issues to small shops when people don't appreciate (or maybe care about) their situation. There was a chap in the Midlands who had a little shop right next to a major bus station, which didn't have any change machines and presumably the drivers wouldn't give change either. Therefore, he would have loads of customers each day buying a 5p sweet with a £20 note and taking all of his change which he had to keep fetching from the bank (and I believe was charged for). The general reaction to his complaints was that he should be glad of the custom and not be greedy as all of those 5ps would (apparently) mount up to untold riches.

I'd flip the question back and ask why would I not have an Amex and just use a Visa or Mastercard, when the rewards are so much better

Fair point, but those generous points schemes don't come out of thin air and it most certainly isn't making Amex poor by offering them. They're subsidised by people paying by cash or with 'less generous' cards and, as the balance tips and more people cotton on and get Amex cards, the subsidy will come from everybody as the prices rise to pay for the points (plus the inevitable processing charges and middle-man cuts).

Would you be happier paying a flat £10 for something or £11 and getting 60p's worth of points - maybe with big restrictions as to where you can spend them?

Oh wow I understand now, the rewards sound great! Thanks for teaching me something today

We have an Amex platinum charge card which we use for food , groceries etc to collect air miles, we get travel insurance , free room upgrades with Hilton, Marriott, SPG hotels, airport lounge access and it has a great concierge service. Couldn't get into a top restaurant in London once, rang Amex and they were able to get us a table. it has no credit limit on it but you have to clear the whole balance every month. We've had one for about 15 years and more and more places are accepting it now.

It sounds like Amex is only worth having if you regularly stay in business hotels and use it's airline partners. There are hardly any flights from any of the 6 airports I have easy access to for those airlines and the few that are, are almost always far more expensive than Ryanair/Jet2/Easyjet etc, so it sounds like the points might not be worth it for me.

I too am cynical about this Amex small shops thing. They are trying to make small shops think that there is a big demand for Amex by paying the £5 bribe to cardholders who will then go in small shops and try and pay on Amex.

Small shops who start taking Amex will then either put up their prices as they can't afford to take Amex at a loss, ie we will all end up paying £11 for something that should cost £10 so that Amex card holders can get 60 pence worth of points to spend on Airlines and Hotels that many people don't or can't use anyway.

Fair point, but those generous points schemes don't come out of thin air and it most certainly isn't making Amex poor by offering them. They're subsidised by people paying by cash or with 'less generous' cards and, as the balance tips and more people cotton on and get Amex cards, the subsidy will come from everybody as the prices rise to pay for the points (plus the inevitable processing charges and middle-man cuts).

I'd say 95%+ of my AMEX spend is for large retailers or service providers where I'd guess there will be other factors driving price rises (eg Brexit). Just skimming a recent bill and most transactions are online only purchases where cash wouldn't be an option (Ocado, Amazon, Uber, Apple Pay, Deliveroo, Netflix, Spotify etc), large high st retailers (H&M, Uniqlo, IKEA) etc or if it's small transactions then it's for large scale retailers who I suspect won't be raising prices for a few extra AMEX cards from a single marketing campaign (Sainsburys, Pret, Superdrug, Waitrose). Small transactions from small independent retailers I tend to use my Monzo card (Mastercard) because it helps me keep track of the little spends (eg how much I'm spending on lunch / coffee, or my small independent chemist ) and it's easier to just tap and go without asking if they take AMEX and swapping cards etc

That's a very small amount of spending - however if there's a shop that doesn't take cards and there's an alternative nearby, I'll go to the one that takes cards (and use my Monzo card, not AMEX) because it's easier than going to get cash out specially to buy a coffee / bottle of water etc.

It sounds like Amex is only worth having if you regularly stay in business hotels and use it's airline partners.

I don't use either but is still worth having. I received over £200 in cash back this year alone.

Small shops who start taking Amex will then either put up their prices as they can't afford to take Amex at a loss, ie we will all end up paying £11 for something that should cost £10 so that Amex card holders can get 60 pence worth of points to spend on Airlines and Hotels that many people don't or can't use anyway.

It doesn't cost that much more than visa/mastercard and I doubt that everybody is going to start using them as evidenced by this thread.

My old workplace was charged 50p for
spends under £5, 2% for spends over and 24% was the quote to take Amex

Really? Are you sure?

I run a small business and we pay something in the region of 1% for credit cards and 1.25% for Amex!!!!

That’s with Lloyd’s cardnet.

And the APR on Amex is usually very high for cardholders, so not all their profit is from retailer fees.

I have an AMEX platinum card which gives a tiny bit of cash back on every spend., It usually amount to an additional £100 over the course of a year which is credited back to my account on the November bill so just in time for Christmas. I only use it for the cash back which was a higher percentage when I took the card out!

I use Visa for other purchases where AMEX isn't accepted - that too used to be a cashback card but no longer.

@19lottie82 yep I’m sure. We were only open 75 days a year so were charged a lot to balance lack of trade. Not sure if that’s changed in the year since they made me redundant

I have an Amex card and use it to collect Avios points. We are flying to New York in June first class both ways with the points we have saved up.