We received notice from our merchant processor that American Express plans to increase processing charges for merchants by more than 50% on October 13, 2010. This is the transactional cost that is taken out of each charge that retailers like Rokland process.
While transactional fees are only a few percentage points of the total order charged, it is important to remember that profit margins for retailers are much smaller than the actual amount charged (in other words, when you charge $50.00 to your credit card with a retailer, their profit on the items sold may only be $3 or $4 after various fees and costs are deducted). Therefore a massive rate hike like this from American Express really cuts into the margins of retailers.
Accepting such a rate hike would mean we have to pass on the cost to all of our customers, whether they use American Express or not. This is because American Express terms prohibit us from charging a small fee to buyers who use American Express.
In these economic times we feel it would be irresponsible to increase prices to all of our customers due to the actions of one credit card company. We have been given two options by American Express- accept the rate hike, or don’t accept American Express. We have selected the second option.
In the event the proposed rate hike does not take place, this may change. We wanted to give advance notice now, and will make necessary changes on October 13, 2010 on our web site so that you will know when making a purchase what credit cards are accepted.