Updated
Who Pays for Amex Offers?
This is a question many have wondered and a reader recently brought up.
When Amex Offers first came on the table a while back, I had assumed that Amex  is offering credits at various stores, similar to any other credit card rewards program. And that’s likely the way Bank Of America’s program BankAmeriDeals works. Over time, it became clearer and clearer to me that with regards to Amex it’s the merchant who is footing most/all of the bill.
Case in Point: It’s been pointed out that Sam’s Club recently added a shipping fee on many gift cards, clearly in response to the overwhelming response to the recent Amex Offer there. They also stopped carrying lower denomination Sam’s gift cards thus requiring us to lock in some money and not get anything totally free. We updated the  post All You Need to Know About the Sam’s Club Amex Offer to reflect the new reality. (I’d guess that after the offer expires, we’ll see these changes revert back.)
If Amex is footing most/all of the bill, it’s hard to understand why Sam’s would be too concerned about the influx of orders. At the very least this indicates that half or more of the bill is being footed by Sam’s. We found one data point indicating this as well that it’s the merchant who is funding the offer, not Amex.
It’s quite possible that Amex gives some perks to the merchant. Perhaps the merchant doesn’t need to pay processing fees on those transactions. Perhaps Amex negotiates other discounts/rates as part of the deal.
The Exceptions
The obvious exception to this the case of Small Business Saturday where Amex is clearly footing the bill. There’ve also been similar such offers such as Small Business August which wasn’t specific to a single merchant and it was Amex covering the cost.
No Backsies
Another interesting thing worth noting is that with the Sam’s offer and the recent Smart and Final offer, it appears that both merchants were caught off guard and didn’t realize how it would play out. Yet, in both cases, they did not immediately pull the offer from being further available. Seemingly, that would have been the logical first step in damage control.
This leads me to believe, that when a merchant agrees to an offer with Amex, they have a solid contract agreement with regards to how many offers will be available or how long the offer will be available. They can’t just call up Amex and ask them to take it down.
It still surprises me a little that Amex wouldn’t be willing to make an exception and pull down the offer early; deal-hunters are hardly the demographic that Amex is trying to please.
In my experience, the bill is footed by the merchant. I recently had this confirmed by American Express during a dispute with a merchant.
Back in December I bought a stack of $100 Amazon GC at Staples using AmEx’s offer on $20 for $100. The clerk accidentally swiped one card twice and didn’t properly credit it back to my card. I had a long on-going dispute with Staples via AmEx and Staples only credited me $60.
When I brought this up with the AmEx CSR, she told me Staples had already refunded me $40 (the amount I had received from Staples as credit from the merchant!).
Thanks
Agree Sam’s behavior is borderline paranoic. My recent order were put on hold because i need to reach out and resolve it.. Then they call me to confirm my number and if myself placed the order.. Nevermind the silly activation gc policy. This is the first amex orders for Sam Club and they acting so childish.. I am going to stick to them by cancelling my account and keep amex cashback.. I suggest everywhere do the same..
Sounds like it was a real pain for you.
Not that slickdeals is any kind of definitive source, but this topic came up in the recent Sam’s Club thread and someone who likely worked for Amex chimed in and said the merchants pay for this service, not Amex. See and . And as further support that Amex’s contract with the merchants is a hard contract to break… about a year ago I received $40 statement credits on a bunch of my amex accounts and received letters in the mail saying it was in response to an amex offer that was pulled. It was an offer I didn’t even plan to take advantage of, but because I had opted in and then it got pulled, they credited me in case I had planned to use it. It still stands as my best amex sync deal to date, since it was basically free money for simply clicking on the offer! As a result, I opt in to every offer I can now, even if I don’t plan to ever use it.
Oops, looks like I didn’t use the hyperlinks correctly. Hopefully you guys can fix it.
Thanks for the link.
Sam’s Club’s behavior really makes them look like amateurs compared to Costco. When Costco.com had a $15 off $110 Amex offer, many people (including myself) bought $100 + $25 gift cards online. Costco probably noticing the strange deluge of $100+$25 gift card orders, they decided to offer a $125 value gift card, to save themselves money printing and shipping gift the separate gift cards.
Agreed, I’m not impressed with them.
Really? The offer is $20 off a $20 purchase and they’re surprised people are getting stuff totally for free? If they wanted us to “lock in some money” they should have just made the purchase requirement higher.
Yeah, it seems a little odd, but apparently they were caught off guard.
I too think that it is the merchant that is covering the costs of these promotions. That being said though, it is Amex making the offer to the cardholder and therefore will be responsible if the terms are not fullfilled. They open themselves up to lawsuits if for instance they would pull an offer after a card member already enrolled in it. That would cost them probably more than the initial (marketing) cost of the deal they constructed with the merchant. I myself have on at least two occasions received an Amex Offer credit from American Express without using the offer. Although I don’t have the letters anymore, it was something about being enrolled in an Amex Offer and the merchant for whatever reason not being able to meet the terms of the agreement. So they just flat out credited me the value of the offer.
Very interesing about getting a credit without using the merchant. Never happened to me.
Yep. I’ve had the same experience of getting credits automatically when a merchant couldn’t meet the terms. Received letters in the mail from amex explaining what happened. I’ve probably netted $200+ dollars in free money that way.
Interesting
Sorry to say that Chuck but this is not the kind of post I expect from this blog. I can’t see any hint of evidence or research here, only your opinion which may or may not be the case. I agree with the opinion that the merchant and Amex will have an airtight contract before such an offer goes live so I understand it should be close to impossible to pull such a thing unless there’s an obvious mistake or the offer was posted prematurely. What I don’t understand is why Amex apparently doesn’t talk to the merchant upfront when they set the rules for an offer. Amex should know what to expect – they’ve been doing this long enough. So why don’t they warn their customer (= SC, S+F) that over-generous terms will cause them some damage. I see this is as very bad customer service from the Amex side.
Yeah, it is odd that Amex doesn’t give a heads up to the merchants.
like the post. Don’t love the grammar
Have to agree with you and also JB. I’ve slowed down my traffic to this site due to poor grammar and lack of empirical evidence. Lots of speculation and hardly any data points. More articles by William please!
I’m always trying to perfect my writing skills and I’d love to hear how it could have been written better.
It’s the title! pay should be payS
You guys don’t seem to spellcheck/proofread as much as other bloggers. I know this isn’t the New York Times (whose people also make mistakes occasionally) but on any given day I can usually pick a grammar or spelling error from the summaries on the front page.
It doesn’t bother me anywhere as much as it does Ny, but do I find I have to re-read sentences more often here than on other sites.
Not just picking on Chuck, William does it too.
Overall, you guys are doing a great job – keep up the good work!
Russ, are you the pot or the kettle? Your third to last sentence/statement could use some proof reading or grammar depending on your intended usage.
Ahh yes, that is a bad mistake. Thanks for pointing out.
I actually do spend a nice amount of time picking up on grammatical issues, but I missed this one. Thanks, will update.
I do it all the time, I don’t proof read as much as I should. But it’s usually one of two options:
1. Proof read multiple times and get somebody to double check each post
2. Write more articles
I usually take option #2 as I don’t want people to miss out on stuff, but I’ll try and be a bit more careful in future!
You could always hire a professional editor. I’d be happy to do it on a per-article basis for a small fee.
Hi JM,
This blog doesn’t really make much money so unless your fee is like $0.50 per article I doubt we could afford it.
Feel free to make constructive criticism and we can fix any issues. We all make mistakes and grammar isn’t something I put a high priority on (much to the dismay of many readers, yourself included) but something we can work to fix if you point out recurring issues.
You know what I can’t stand? Grammar nazis that come on here and complain about missing letters and grammar. Who CARES? You obviously but not the rest of us. As a professional, post graduate degree individual, I feel very confident reading past the grammar mistakes. I would rather see more posts that have a few mistakes than less posts so that grammar can be double and triple checked.
Chuck and William, here is a voice from the other side. I enjoy the content and the writing and I don’t even notice when there are mistakes. Your message gets across to me.
I’m more or less with Carl here. While there are some grammar mistakes here and there, I’ve never had a problem understanding the information so I really don’t care.
Oh no, look what I started! I’m not a grammar Nazi, I just like a smooth read and the little mistakes trip me up and make it more of a chore than a pleasure to read, at least over time.
Nothing wrong with voicing a complaint. It’s duly noted and something we will discuss as a team. I think sometimes we just get excited and want to post straight away and then don’t come back and fix the smaller mistakes.
I agree with your logic, with the one exception of small business Saturday.
Yup, I’ll add that point in.