Yes, I’ve heard more too. I believe their rate is 3%.
Actually, I doubt it was so much the ability to get an AMEX that was the big deal. I suspect it was more the exclusivity of only shopping at a super-expensive place where the other customers could either pay cash, or pay on their AMEX and pay it off at the end of the month, or in other words, you could afford to shop at Neiman’s and not have it be a huge deal for you.
That can’t be it. As has been said, Costco also only takes Amex, and nobody would say that Costco shoppers are rich, or consider themselves so.
Probably because they’ve negotiated a lower discount rate with American Express, in exchange for exclusivity.
American Express has done negotiations like this before. Cite
In business it’s all about the money, and credit card interchange fees are an obvious target because they affect every credit transaction.
Amex’s typical interchange amount is higher than VISA or MC. It is possible that Neiman Marcus only accepted Amex because they negotiated a deal with them, as Costoc did, but I suspect not. Neiman Marcus isn’t like Wal-Mart or Costco. Their business isn’t based on hounding their suppliers and cutting costs. They are all about luxery and image. 20 or 30 years ago, the image of Amex was definitely far more “upper class” than any other card, except maybe Diner’s Club. I am pretty confident that this was not a cost play, but an exclusivity/image play.
This used to be true, but is no longer.
Many people with VISA cards have some kind of reward system on them. The entire cost of the rewards is passed on to merchants that accept the card. The average Amex transaction at my store costs me less than the average VISA Rewards Card transaction.
Either way, I accept basically every card out there, plus cash and personal checks. I want to make it as easy as possible for people to spend money in my store.
This is not always true. Some processors will not discern amongst card types for an issuer and will process them all at the same rate. Some may be given up on the basic or debit cards, but gained on the rewards or P-card.
And if you think rewards cards are bad, some processors get north of 4% for a government P-card
Exactly. The (adorably misguided) OP’s fallacy is in trying to apply Walmartesque logic to a business which is basically the antithesis of Walmart.
There are a great many businesses out there which thrive by appealing to the lowest common denominator; making their products as cheap, plentiful, ubiquitous and easy to buy as possible. Walmart is one of them, and there are many more like it which keep with its general philosophy of high accessibility and low margins. They make their profits by moving lots and lots of product, so they will do anything they can to broaden their customer base.
Now an upscale boutique retailer like NM is looking to cater to a market of people who basically feel like they are above all that. While they’re a much smaller group than the Walmarters, they’re also much wealthier and they are willing to pay drastic markups as long as they feel like they’re getting something the unwashed masses could never have. As soon as a business starts adopting Walmartian philosophy in an attempt to draw in the dregs, they’re going to go elsewhere. And when the dregs realize they can’t afford any of that shit anyway, well, now they’re really screwed.
Missed the edit window, but an analogy that occurred to me would be a high-end steakhouse with a dress code. The OP’s question would be like asking “Why do they have the dress code, when there are so many more people out there who’d rather wear t-shirts and jeans? They could get so much more business if they’d just let those people into the restaurant too!”
Since my point was that it makes VISA and Amex basically equivalent to a merchant, it looks like we are in agreement.
Unless you have a merchant account that doesn’t discern amongst the types of cards from an issuer. That was my point, and thus for me I certainly do not see them as equivalent and Amex costs me a full 1.2% more to accept than Visa/MC. Not all processors are the same.
They are not all the same. The language on our VISA/MC contract is convoluted, and makes it sound like they’re cheaper than Amex. When we actually look at the bill and do the math, however, it’s a different story.
Processors make it difficult to do “apples-to-apples” comparisons. There’s a per-transaction fee, a per-month fee, a percentage of transaction fee (which can vary depending on average transaction size), a fee if your electronic reader can’t read the mag strip and you have to key it in manually, a fee if you don’t close out the batch on time, a fee for running a reward card (basically passing the cost of the reward on to the merchant), and all of these fees vary between VISA, Mastercard, Amex, and Discover.
It’s a mess, but on average Amex costs us about the same as the other cards.
I read somewhere that as part of the recent financial reforms, Congress was going to change the law that required merchants to treat all credit cards equally, so that they could charge users of rewards cards more, or give a discount to those who used credit cards with lower merchant fees. Does anyone know if that’s true? Because my sole credit card is an airline mileage rewards card, and if it’s going to cost me extra, I’ll sign up for a low-fee card to use as well.
Pretty sure there is no such law governing this - it’s part of the merchant agreement (i.e. private contract) between merchants who accept credit cards and the company who owns the card network. In order to be able to accept Visa and MC (for example) and display their logos at their place of business as an authorized merchant, the merchants must agree to their terms.
Of course, there are already many merchants who flagrantly disregard the terms of their contract by charging an additional fee for card purchases (or giving a “discount” for cash purchases, which is essentially the same thing). Since these contracts are rarely enforced, they get away with it.