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American Express Faces Another Fee Protest : Retail: Catalogue companies follow restaurateurs’ lead in complaining about what they have to pay for credit card transactions.

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From American Banker

American Express Co., still reeling from a revolt by restaurateurs over its card fees, is facing dissension from another big merchant group.

Catalogue companies are grousing that the fees they pay American Express on card transactions are too high.

“There is a discrepancy between the cost of taking American Express and other cards,” said Claire Gruppo, president of Special Interest Video, a direct-mail marketer in New York.

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A protest by a group of Boston restaurants in March forced American Express to reduce the fees it charges eateries for transactions authorized through electronic terminals.

Catalogue companies, whose customers charge $8 billion a year on American Express cards, also want their fees cut.

The catalogue industry “has companies doing millions of dollars of transactions a year electronically, and we don’t pay the same rates as the restaurant down the street does,” said Erv Magram, president of Lew Magram Ltd., a New York-based woman’s apparel catalogue company. “There is an inequity there.”

Fees to merchants for MasterCard and Visa transactions typically range from 2% to 4%; for American Express transactions, they range from 2.5% to 5%.

Concerns over fees are cropping up throughout the catalogue industry, said a spokesman for the Direct Marketing Assn., which groups almost 400 catalogue companies.

Fees are expected to be a hot topic at the trade group’s catalogue conference Tuesday in Chicago, he said.

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Magram said he has no plans to stop taking American Express, while adding: “We have some questions for them.”

But DM News, a newspaper for the direct marketing industry, last week reported that some catalogue concerns may stop accepting the card in some cases to determine the impact on sales.

Gruppo of Special Interest Video said her firm will consider a boycott of the card in select markets if the cost of using American Express is found to be too high.

An American Express official said the company has not received any complaints from its mail-order customers.

“Our partners feel we bring them tremendous value,” said Kathryn A. Russell, vice president in charge of retail industry marketing. In the first quarter, American Express’ mail-order sales rose 13% over the year-earlier period.

The direct-mail catalogue business is a big one for the credit card industry.

Catalogue firms racked up $60 billion in sales last year, according to DM News, and 85% of those involved a credit card.

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Overall, American Express accounts for 15% of catalogue purchases made with a card.

Ted Fleming, president of Direct Marketing Guaranty Trust, a card processing firm, said the recession is also a factor pushing catalogue firms to request lower fees. His company processes card transactions for 400 catalogue houses.

Along with fee cuts, the catalogue companies would like American Express to promote their industry. After the Boston incident, the card company launched a marketing campaign in some cities to help restaurants lure more diners.

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