I love American Express, I know a lot of people out there don’t, but I think it’s a great company. They do a lot of good stuff for small businesses and they are very good at what they do overall. However, sometimes even the best of them screw up and hopefully by me pointing this out will get the point across. (Hey, I try!)

Many people often think that Amex isn’t so accepted by merchants because of the fixed transaction costs—not true, says one unnamed industry expert. The fact of the matter is that many merchants, especially online merchants, would love to take American Express, after all, why not? It’s a good card and its members often spend 30% to 50% more per transaction and, more so, many small business owners use it. While so much of the industry has often thought it’s been about the fact that American Express will not negotiate with its merchant pricing, the reality on the field level is very different.

When it comes down to it, it’s about their chargeback policy. Unlike Visa and MasterCard, which run an open loop system, American Express is closed, meaning that everything ties back to them and them only. When a chargeback occurs, American Express is notorious for siding with the end consumer and, rightfully so, the bulk of American Express’s money is made off of the end consumer so it’s no surprise that they know where their bread and butter is. This leads to a heavy amount of fraud, giving way for consumers to get away with purchasing items and simply charging them back at a whim. It is this fear that drives many merchants away from accepting American Express. I’m sure you’ve seen the Amex Tina Fey commercials where she declines orders that she doesn’t feel were made by her. Well, that’s the same thing that keeps online merchants away from accepting Amex.

Ultimately, American Express is going to have to find a way to mitigate the liability cost for small businesses when it comes to chargebacks. Otherwise, senior executives are going to spend the next ten years continuing to ask themselves why more online merchants simply won’t accept it. My advice: find a solution and market the hell out of the service, Amex is a great name with great benefits, use it or lose it