Need some advise...
Just had my first charge back( three weeks ago) from Amex...for 5500 hundred dollars. First Amex sided in our favor and then my client appealed and won on some technicality. Amex said the matter CLOSED and there will be no further discussion. I do approx. 20,000 a month with them with an average ticket of 3000 dollars. I have been accepting cards for about 5 years and have a growing volume. I keep a six figures in my checking account at all times. Not sure if that matters to them or not.

Here are my questions;
Do you think they will pull the plug on me? I heard that they not only look at your number of charge backs ( whcih is low) but also your amount of charge backs as a % of monthly volume( which in my case would be very high). Based on this one charge back does that put me in the trouble zone? If they do...will this effect my Visa/MC merchant account ( which is in excellent standing).
Can I do any thing before the ****hits the fan to obtain the new amex merchant acct number?

Your comments would be greatly appreciated.
Dave

Welcome to the forums Dave400!

Unfortunately, no one really can answer that question. From the details that you provided, it would seem AmEx would not terminate your account. There is a possibility they would terminate your account but hopefully you might have a good account representative that you have an even better relationship with.

And no, it should not affect your Mastercard / Visa account either. There is a slight chance but I doubt it will affect it.

It is very difficult to really answer questions like this because each merchant is different, each MAP (merchant account provider) is different.

Hi Dave,

For the best advice, it would be good to consult with your merchant provider and, of course, American Express.

But from general experience, I think they look at several different factors in risk management before they close an account.

- Number of chargebacks
- % of chargebacks vs. volume
- Merchant history

If what you said is correct, I don't think you have anything to worry about (other than suing the client that owes you $5500). I'm sure AMEX will look at your history, monthly volume and the fact that you did dispute the chargeback and consider it case closed.

If you do end up suing the client (which I'd recommend for any amount over $1,000) and winning the case, forward your court papers to Amex and I'm sure they will remove that scuff on your record.

Barring no mass chargebacks on your account in the forseeable future, I don't think you should be concerned.

Usually, American Express and Discover are setup seperately than the Visa/MC relationship -- if this is the case, then your only worry would be with Amex. Again, for the best advice, contact your merchant account provider and Amex if you really want some good assurance.

I have a consulting practice that I currently run as a part of my present operation. Approx. 20% of my revenues come from this side of my business. I was thinking off creating a separate LLC and then opening a new merchant account as a "safety net". If this is a good idea...then does it matter when I do it...I was thinking that it would be cleaner to do it now prior to any termination. Your thoughts?

It is a very tricky situation. Your name / SSN / address etc will still be on the merchant account application.

Do you have a good relationship with an account representative at AmEx? If so, call him / her. There are so many factors that can be reviewed, it is practically impossible for anyone, except AmEx, to give you a definitive answer.

As far as going out and creating a separate business, etc., this might even make you look more guilty in AmEx's eyes. AmEx has a tendency to review a bit more than Visa / MasterCard.

We opened our Visa/ MC/Amex account via a local bank....they in turn have outsourced our acct to NOVA. I never even knew we had a Amex rep...the NOVA people say they have nothing to do with Amex and can only help us with Visa/ MC. What do you think our Amex rep can do for us in this situation. Thanks

They would be the ones to assure you whole-heartedly that your account is safe. You might not have one - some people do and some do not. I would call AmEx now and try to talk to someone since you are really worried about this.

It is good to keep the lines of communication open with your MAP.

I would think you would be safe based on the info provided, but as stated above, you should be talking to them instead of asking on a bbs.

However, since you did ask, I have a question too. What was the "technicality" that caused them to reverse their decision?

In an ideal world calling Amex seems like a logical option...and I am considering it....just feel like i am calling the IRS and asking them if they are going to audit my return....kind of calling attention to yourself....discussing it here provides a street level perspective that is very valuable. I think your accessment of my situation is on target...and you have confirmed my own feelings on the issue. Never been down this road before and the experience/coaching is very helpful.

You are right about that - but honesty is always the best policy in this type of situation. You want to keep the lines of communication open. After all, you want to know if they are going to close your AmEx account. And they are the only ones that will be able to answer that and give you a definitive answer.

You have to keep in mind, that having a merchant account is similar to a revolving line of credit as well. You have a lot of things working for you - which is something that you want to mention / stress while talking to them.

First off... unless Amex has indicated they are closing your account, there may not be anything to worry about here.

I'd suggest talking to Amex about your concerns, stating your case and everything might be absolutely fine.

That being said, Amex CAN impact Visa/MasterCard processing because Amex can place merchants on the TMF (Terminated Merchant File).

I have seen this happen more than once when a merchant applies for a new account and then it gets flagged for being on the TMF.

However, given your positive history with Amex and your financials - you'll probably be just fine. Talk to Amex and they should be able to verify that they only closed out the chargeback issue and it won't impact your ability to continue to process Amex sales.

Best of luck in resolving that issue!

I had something similar happen to me actually about a month ago but AmEx did not do anything to my account. I did not worry about it all that much, I figure that since they are a pretty large company there would not be too much I could do.

Let us know how things went though.