[Biz Talk] Amex or not?

Jewelry Discussion
21 
By not fostering loyalty you have made it easier for your
customers not to shop you. Make no mistake, an AMEX is a status
symbol. By not taking it you are also not recognizing his hard won
status, you are pissing him off.

I believe that the loyalty I have fostered with customers is above
and beyond whether I take Amex. I believe I have products and
services that set me apart from other retailers. I believe the skill
and knowledge I have sets me apart from the businesses that take
Amex.

There is a benefit to the customer to shop at my store that is
greater than the benefit of not being able to use the Amex card. I
believe there might be people who will not spend money where Amex is
not taken. I believe this type of person is so far and few between it
is a moot point.

If you want to shop at my store, leave your Amex at home. I believe I
have a sense of whether I am losing sales by not taking Amex.

I believe that some of my customers would rather the status of having
my work over the status of using their Amex.

Richard Hart

22 
How many times does this happen and you just don't know? You might
think, "sales are holding steady so what's the problem?" That kind
of thinking may have cost you a 10% or greater gain for the year.
To survive and prosper you must look at the long term. No customer
service? No customers. An exaggeration for sure but I hope you see
the point.

I think Neil gets an A in marketing!

What’s more, consider this:

When I was in retail, we were tracking freaks…tracked everything
we could think of. I know that it cost me between $275 and $300 to
get a new potential customer in the door. And I know that it was my
job to make sure that it was always EASY for the customer to spend
money, not difficult.

That first sale is always the hardest, and it defines you and your
business in the mind of the customer. If that person whips out his or
her black Amex card and you deny it, you may as well have slapped
them in the face. Do you know how difficult it is to get a black
Amex card?

Stop thinking like a cheap accountant, most of them couldn’t sell
steak to a starving man. Remember, you are here to SELL.

EVERY single sale I made over $10,000 was put on an Amex card, EVERY
one, and I had plenty. Would you decline that person? Apparently you
would, and, hopefully, they would shop around and maybe find me!
Please, please, please do NOT do something that will a customer any
excuse to shop your competition or you may NEVER see them again.

You got it right, Neil, go count your money.

Wayne, down off the soapbox

23

Nancy,

If you have a high income clientele, yes, keep taking Amex. If
not, drop it.

I don’t agree with you on this, but the way I would phrase this
statement if I had made it would be:

If you have a high income clientele, or ASPIRE to having a high end
clientele, keep taking Amex.

And who on this list doesn’t aspire to having a high income
clientele?

But then maybe I should say: who on this list doesn’t ASPIRER to
having a high end clientele. Oh darn, my punning is coming back
again. Hit me please.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC

24 
I'd say this comes down to competition really. OK, so you can't
point to a single sale you lost because of not doing AMEX. But that
is really looking at just what is in your face. What about what you
DON'T know? How about what goes on in the mind of a consumer who
prefers AMEX?

Here’s my scenario:

I like a specific designer’s jewelry ($3,000+ per piece). Our local
(Ohio) jeweler who carries her work doesn’t take AmEx. We happened
upon a jeweler who also carries her work while we were on vacation
in Arizona… and they take AmEx. My husband is usually involved in
these purchases (gifts) and he prefers AmEx for all of the described
reasons. Through a purchase of this designer’s work in Arizona he
realized that he could use AmEx and he began what has become a long
standing relationship with the Arizona jeweler. The Ohio jeweler
doesn’t have a clue what he has missed.

I must admit that this is only relative for us with expensive
purchases (for me this jewelry is expensive). Another observation…
I’ve noticed that it’s often men who use/prefer American Express. If
the “expensive assumption” and “male dominated assumption” are
reasonable assumptions, then perhaps you can compare this to your
target customer to evaluate if American Express is important.

Jamie

25

A further thought:

I currently accept Visa, Mastercard, and Amex. I'm thinking of
dropping Amex to reduce my fees and simplify my bookkeeping..Am I
missing something? Thanks!

The above was the original post. It is about AmEx from a vendors
perspective; not from the consumers point of view.

KPK

26 
For one percent. Whoop dedoo.

In this day and time of internet shopping and competing with blue
nile profit margins are lower, especially on diamonds. Custom jobs
have a large profit margin so loosing 1% is not that bad, but on a
$10,000 diamond sale that has a 1000.00 profit, 1% is 10% of profit.
I close at 3:00 on Saturdays, and close on Sundays, do I loose sales
yes I do but I choose to have some free time. I could open at 7:30 am
and stay open till 11:00pm and have sales, I could sell cheap crap to
have more sales and on and on and on. There are times that we just
have to choose what works for us. If someone does not want my work
because I don’t take AMEX, maybe I don’t want them as customers. If I
may us Dan Spirer as an example he said in a few post back that he
only works in 18k and platinum, how many sales has he lost because he
would not make the piece in sterling or 14k and does he care.
Another thing to look at is how many sales you will loose 1% on,
because you take Amex normally. So you run 75000.00 through AMEX a
year, you lost $750.00 extra from MC/ Visa. You have to take that
amount out of the profit you made from the 1 or 2 sales you gain from
taking AMEX. Bottom line we choose what our business model is and we
can’t worry about the few sales we loose because of our choices. This
is like the “show or not show price tag” thread, I don’t show prices
so how many people have not come in because of that. WE CAN’T PLEASE
EVERYONE.

Bill Wismar

27 
Make no mistake, an AMEX is a status symbol. By not taking it you
are also not recognizing his hard won status, you are pissing him
off.

If having AMEX is a symbol of something, it is got to be a symbol of
stupidity. This is the worst credit card I ever had. I shredded mine
several years ago and I will never go back even if they pay me.

Leonid Surpin

28

You’re talking about 1.5 to 2% more, you need to “look” like a
bigger business. You’ll find your average sale on AMX is larger than
the others.

Raise ALL of your prices by 3% (really) and never worry about it
again.

David Geller

29

Daniel

I find it hard to believe that your business success is due to your
accepting AmEx. I would think your design abilities, your customer
care (I read your manual) has much more to do with your success than
method of payment.

A distinction between brick and mortar establishments and everybody
else may be the key here. If you were told that any dispute between
you and a consumer would be resolved in favor of the consumer with no
input from you, would you still accept AmEx?

KPK

30 
The above was the original post. It is about AmEx from a vendors
perspective; not from the consumers point of view.

From that point of view, you should accept only cash. Simple
bookkeeping, no bankcard fees, no chargebacks.

Al Balmer
Sun City, AZ

31

Hi Bill,

If I may us Dan Spirer as an example he said in a few post back
that he only works in 18k and platinum, how many sales has he lost
because he would not make the piece in sterling or 14k and does he
care.

Thanks for referencing me to argue the opposite point I’m making in
this thread{-;. I think the reasoning behind my choice to do that,
and your choice to take more time off, are different than the choice
of whether to take Amex. I don’t work in sterling because it simply
isn’t profitable to me. I don’t have the time to spend making a $150
sterling piece, when I could make the same thing in gold and sell it
for 10 times the amount of money (and hence a significantly higher
profit margin). I don’t work in 14k gold because I don’t like the
color of it and I want to set myself apart from the typical jeweler.
Do I lose some sales because I don’t sell sterling silver? Sure. But
I can’t afford to make them. They’re just cost prohibitive given the
amount of time I have to work in a day. Actually, if a customer were
to take away the amount of my time it takes to sell them something
for $150 I’ve just lost money since most sales take more than a half
an hour to actually make and in that time I could have made up a new
piece in gold (or sold a $2000 piece). As far as 14k gold, I have
never had a customer walk out and not buy from me because I tell them
I only work in 18k. When I explain to them why I do, they always are
happy to buy it from me.

Your closing early on the weekend is a lifestyle choice that helps
you to survive as a small businessman. That too is different. Do you
lose some sales from this? Sure but that is in an effort to maintain
sanity (something sorely lacking for most of us small potatoes).

The question of Amex or not is not quite the same however as you’re
removing a choice that many customers want in order to make the sale
a smooth and pleasant experience. The extra money paid to them should
be built into your profit margins to begin with. If you can’t afford
to sell a $10k diamond with a $1000 markup because when they pay with
American Express it takes away too much of your profit, then you need
to raise your markups. Will you lose a few sales to this? Sure, but
small jewelers are always going to lose price sensitive shoppers
sometimes. It’s better to cultivate the ones who are more interested
in your niche product then to try to compete with the Internet or
some of the big boys out there.

As for your example of the extra $750 you might pay Amex per year,
that amount can be made up in just one sale on an Amex card, given
the fact that the average sale is much higher on Amex than on
MC/VISA. For that matter I’d be willing to gamble two or three times
that cost to insure a few extra high end sales. I mean, I just spent
$10,000 on a two year supply of gift boxes last year to make sure my
product goes out the door looking right for my customers. Annually, I
spend $2-3000 on champagne that I give to customers celebrating
important occasions with a piece of mine. What the heck is the
difference if you pay an extra grand or two to make a few more high
end sales?

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC

32

Daniel,

If you have a high income clientele, or ASPIRE to having a high
end clientele, keep taking Amex. 

And who on this list doesn't aspire to having a high income
clientele?

Me. I have chosen the midrange as my market. I work on an original
for a few weeks, then have it cast in sterling or bronze. Add pearls,
glass or amethyst, peridot, etc. The wholesale shows like BMAC and
ACRE are my market, contemporary American crafts. Wholesale in the
$25 average range. I am not interested in becoming a bench jeweler,
rather creating simple, elegant bridge jewelry. I love figuring ways
to make the work efficiently in production. Love the marketing side
also. It’s my choice and I’m making a living at it. Have a Niche
Award and a few Niche Finalists under my belt to satisfy the ‘for the
soul’ side of me.

I agree with your second statement.

Nancy Goodenough

33 
The above was the original post. It is about AmEx from a vendors
perspective; not from the consumers point of view.

Exactly.

How can one operate a successful business without thinking from the
consumer’s point of view? They are profit, you are overhead!!!

If you think you are not losing sales from not offering all methods
of payment, well, you’re wrong. If you have a bead shop or are just
a re-seller of stock jewelry, that’s one thing. But for items with
higher price points, many consumers will use Amex or shop elsewhere.

Wayne Emery

34

Hi Kevin,

I would think your design abilities, your customer care (I read
your manual)

If you read my manual then you saw the part that talked about what
credit cards we accept and it included Amex and it was a part of our
total attention to customer care.

If you were told that any dispute between you and a consumer would
be resolved in favor of the consumer with no input from you, would
you still accept AmEx?

Yup. It’s already pretty much that way. It’s still worth it. On the
other hand, the only chargeback we have ever had on any credit card
has been from bad cards (just twice). So apparently my customer care
level is so high that no one feels a need to go to the credit card
companies with any kind of a dispute about me or my product.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC

35

Thanks to all of you who responded to my query. It sparked a bit
more reaction than I expected. I probably should have been more
specific about my particular situation. I sell mostly through 10-15
retail shows per year, and my high end is well under $1000. That’s
different territory from you brick-and-mortar jewelers selling
$10,000 pieces, where the Amex makes more sense. Several posters
made interesting points about unknown lost sales, so it’s perhaps
more complicated than it seems.

But Richard Hart touched on something I feel strongly about, that
there are other competitive factors more important than credit
cards. If somebody loves my work, there isn’t anything like it
available elsewhere, no matter what the price or method of payment.
That’s not a conceited statement, just an observation that, love it
or hate it, I do something a little different. I’d like to believe
that a customer’s desire for that trumps the question of Amex or
not. So, for better or worse, I dropped it yesterday. Again, Thanks
Orchid!

Allan Mason

36

Are you saying that Mastercard or Visa is different? Part of the
problem is that the dispute process goes through the consumers
credit card company not MC or Visa itself. They don’t want to loose
their customer so the retailer gets burned. Discover has been the
only card that I have faith in as a retailer.

Stanley Bright
A&M Jewelers
Baltimore, MD

37 
So, for better or worse, I dropped it yesterday.

Allan, I think you made the right choice for your market. It would
be a different answer if you were selling $10k pieces.

Nancy Goodenough

38 
Discover has been the only card that I have faith in as a retailer.

Could you explain this statement further? I just signed up for MC,
VISA and Discover. Why Discover? Because we personally have that card
and use it when at all possible. Why? Because as a consumer you get a
rebate for using the card, and often they have extra cash back on
items like gas, lodging, restaurants, etc. Right now they are giving
5% back on gas purchases. Last year when we went on a trip out to the
Northeast, they had 5% cashback on museums. Since we were visiting
several in the 3 weeks out there, we were were thrilled. Until we got
to the museums and virtually none of them took Discover… Of course
THEY didn’t lose out, as we then used a VISA, but WE the consumer
lost out, which didn’t make us happy.

Every time I ask a place why they don’t take Discover, they say
something about higher fees. Well, I just learned from my new
Merchant Service Provider that Discover joined MC and VISA a few
months ago and they offer the same discount and transaction rates as
MC and VISA.

Did I sign up to take Discover? Yes I did! AmEx? Heck no! But then
I’m not a high end retail store either.

Lynn White

39 
I think you made the right choice for your market. It would be a
different answer if you were selling $10k pieces.

Why do people think Amex is only for the “big spenders” ?

Personally, and professionally, I do not discriminate against any
form of payment, WITH the excpetion of lima beans.

Seriously folks, give yourself as many options available to put
money in YOUR pocket, sure it can be a hassle, sure percentages can
be higher, but you know what? A sale is a sale, this keeps us working
at the thing we love to do most.

For all things to be considered, just think, with the iphones, and
portable web surfing devices out there, the next evolution of payment
will be the instant acceptance of funds thru paypal at trade
shows…hows that for making life easier. Heck, you can even use
paypal as your credit card processing service, take a laptop, use a
cellular provider for internet access, have your customer pay right
there, online, with simple registration and its all good…

We, as vendors, have to make the purchasing process as simple as can
be…limiting the options can be detremental to the bottom line…

P@

40

I have always found two things to be true in a jewelry store and my
now JewelerProfit business

  1. A discover sale is the LOWEST average sale. Being their fees are
    the same as Visa/MC, we take it, but as a convience.

  2. A AMEX sale is the highest average dollar ticket. Just like you
    LIKE to use Discover for cash back, AMEX users like to use it for two
    reasons:

a. Prestige

b. They earn points for travel (I know I do, and lots)

If you traveled, you’d see AMEX everywhere. Again, AMEX doesn’t
costs the 3.2% or whatever they charge. Remember Visa/MC charges
1.65%, so its just another 1.65% higher, that’s all.

Taking AMEX is not required. I’m sure no one lost a sale because
when anyone said “We don’t take AMEX”, the customer said “Oh well, I
have NO OTHER type of payment on me.”

Its like buying regular ring boxes and some really nice ones for
those special sales, I’m sure most of you stock 2 kinds of boxes.
Stocking 2 kinds of credit card payments is the same. You’d never
know if it helped or hurt business, its just part of your marketing
and image of the store.

I have met very, very few jewelers who were doing large numbers that
didn’t have AMEX as a card, and also had 2 choices of ring box
quality.

David Geller

P.S. You’ll be better off personally having an AMEX card over a
discover card when it coems to points.