Micro-ISV’s and American Express - Don’t Mix

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If you accept American Express as a form of payment, or, are contemplating accepting the card, beware.

We have accepted Visa, Mastercard, Discover, and America Express for years. While I never realized it, even though we get an occasional chargeback, we have never (until recently) had an American Express chargeback.

Typically, when you get a chargeback, you simply fill out a form with your side of the story, and almost always get your money (since most chargeback requests are ridiculous, such as ’software doesn’t work’). To my suprise, American Express offers no such option for a MicroISV (or any other software company selling online I presume).

American Express treats a chargeback request as automatic. This means that for up to one year after your customer makes a purchase from you, they can cry foul, and American Express will credit them their money back, and you have no recourse (other than legal action or collection agency). You are not given the opportunity to give your side of the story. Period. American Express will not back you in any way.

In our case, the the customer called us for tech support over 5 months after his purchase, and despite that his invoice, sales receipt, and software identified he had 30 days of support, and that is was explained to him (and offered to him) that he could purchase longer support, he was angry he could not talk to a live tech rep 5 months after his purchase without paying for it, so, he called American Express and they granted him his money back (almost $ 2,000.00!).

How many people purchasing software know of American Expresses policy? How many will purchase your software, only to request a chargeback 6 months later, leaving you will no recourse?

I know, as you read this, you are saying ‘no way, that can’t be’. I agree, but, it’s true. Do yourself a favor. Call them up right now, and ask them ‘how long can a buyer request a chargeback, and, will I have the opportunity to provide my side of the story and prove my case so I can keep my money if a customer requests a chargeback?‘.

Consequently, we have stopped accepting American Express, and will not accept the card until we have the right to dispute a chargeback - a seemingly reasonable thing.

Side Note > The customer that placed the chargeback found this blog (and this posting), and posted (anonymously) his side of the story on this blog - which was essentially “i wanted support 5 months after the purchase, but didn’t get it” - just as I stated above. I decided to remove the post because I do not want this blog to be the place to dispute these things. He obviously genuinely feels he is in the right, but he is not - what he did is illegal (theft), period. Just because someone ‘thinks’ they should get X or Y (in this case, X being 5 months of support), it doesn’t mean they do. Our support policies are clearly stated on our web site, and were explained to the purchaser prior to purchase. It’s unfortunate that we had no recourse through American Express - perhaps this would have been better for him, although I did email him directly a week before we pursued this, with no response of any kind.

Nontheless, the bottom line is, we had to pursue this legally since American Express did not assist us in any way (and we have been using them for almost 10 years now!) Attention MicroISV’s — don’t let this happen to you - call American Express now and learn about your options (or lack of them).