Merchants Not Accepting Customers’ Preferred Method of Payment – Bad Decision?


In recent years, it is more common for consumers in the United States to rely on their debit or credit cards to make payments. Perhaps their reason for not carrying cash is down to safety matters, the fact that cards are generally more convenient, or maybe they simply do not have the cash and need to make a payment on their credit card to pay back later. Whatever the reason may be, the use of cards is now the norm, and the numbers are still growing. Therefore, it should be a matter of principal and common sense that merchants should be willing to accept payments via credit or debit card. However, it has come to the public’s attention that many merchants do not accept American Express and Discover cards.

“Why is this?” you ask. Perhaps merchants are unwilling to accept American Express and Discover because they aren’t able to pay the high credit card processing fees; the current financial recession probably does not help the situation at all. Many people are arguing the fact that saving a few dollars by not accepting these cards is not worth it when considering the aggravation the customer may experience when his or her preferred method of payment is refused. The customer is always right, after all.

Merchants who are not willing to accept these payment methods are more than likely doing the wrong thing. American Express and Discover are among the top credit card brands in the United States of America. Their generous rewards to consumers just for signing up contribute highly to their success, and thoughtful gestures to lure the consumer in include things like cash back, hotel discounts, gift cards, and exclusive VIP bonuses like access to airport lounges. It is surprising that so many consumers are willing to pay the steep annual charges just to gain access to these tempting treats, but in fact, plenty are more than happy to pay. Statistics show that 89% of consumers are enrolled in an American Express loyalty program, and 78% of Discover customers with a rewards card choose to use it as their primary card.

More generally, 51% of Discover cardholders said they have not/would not return to a merchant if their card was refused, and 72% of American Express consumers would be more likely to return to a merchant if their card was readily accepted. Credit cards allow consumers to eliminate the need to carry cash and make convenient and spur-of-the-moment transactions, whilst ensuring that added safety at the same time. Basically, a merchant who chooses not to accept consumer payments by American Express or Discover is eliminating their sales figures and customer loyalty. Sure, saving money is a good enough excuse, but is rapid customer base loss really worth it?