The Risks of Accepting AMEX: A Small Business Survival Story

For many small business owners, getting paid by a client holding a platinum or black American Express card feels like a mark of prestige. It signals wealth, status, and a client worth serving. But Ken Childs, a Los Angeles private investigator with more than twenty-five years of experience, learned that prestige does not always equal protection.

Childs is not new to the business world. He has been licensed since 2005 and has served as Vice President and Board Member of the California Association of Licensed Investigators. His testimony has been recognized in court, and his work has been featured on national outlets including Dr. Phil, The Dr. Oz Show, Access Hollywood, BuzzFeed, and the Los Angeles Times. Despite that résumé, his company, Paramount Investigative Services, Inc., remains a small private investigation firm. “We are small by design,” Childs says. “That is what allows us to stay effective and personal in our work with clients,” for cheating girlfriends to Trademark infringement with under cover perchases.

And that is what makes his story resonate so strongly: if a business with this much experience and credibility can be nearly undone by an American Express EMV chargeback, so can yours.

When a Swipe Can Sink You

The case began like many others: a well-dressed client arrived with convincing documents and a story of stolen property worth millions. Paramount’s investigation team poured hours into a surveillance, research, and fieldwork. Payroll was met, equipment was deployed, and expenses mounted. But when the client turned on him, it was not just a refusal to pay.

It was an EMV reversal.

“With American Express, especially for Platinum and Black cardholders, a chargeback is as simple as swiping left,” Childs says. “That is all it takes. One click on their end, and months of work and tens of thousands of dollars disappear on me.”

For cardholders, the process is quick, intuitive, and stacked in their favor. For the business, it is the beginning of a nightmare. Overnight, $50,000 in payments were stripped from Paramount Investigative Services Inc. account, leaving the firm scrambling to cover payroll and expenses that had already been spent.

“Everything about the case looked legitimate,” Childs recalls. “Then in an instant, months of work vanished, and we were literally left holding the bag.”

Why AMEX Tilts the Scales

Unlike Visa and Mastercard, which route disputes through banks with some checks and balances, American Express acts as both the card issuer and the network. This dual role means AMEX has total control over how disputes are resolved.

The odds for merchants are grim. Studies show AMEX merchants win only about 28 percent of chargeback disputes, compared to 35 percent for Visa and 33 percent for Mastercard. Stacking the deck even further, cardholders are given up to 120 days to file a dispute, while merchants often have just 20 days to respond. Miss that window, and the decision almost always defaults to the cardholder.

For small private investigator businesses already running thin margins, the penalties can be devastating. Companies that exceed a one percent chargeback rate for three consecutive months can face $25 fees for each additional chargeback, on top of the money already reversed. Add in the administrative burden and lost time, and a single AMEX dispute can cost a business up to $100 per incident beyond the reversal itself. And the structural issues run deeper.

While nearly 99 percent of U.S. merchants that accept credit cards also accept AMEX, some of the biggest names in business are pushing back. Costco famously cut ties with AMEX in 2015, and in 2024 eBay announced it would no longer accept AMEX worldwide, citing “unacceptably high fees.” If giants like eBay and Costco view AMEX as too risky or too costly, the impact on a small firm can be devastating.

The reason is simple. AMEX makes its money from the fees and loyalty of high spending cardholders, not from protecting merchants. Their priority is keeping those wealthy clients happy, even if it means a small business absorbs the loss. “If you are a small firm, your contracts and receipts will never outweigh the value of an AMEX Platinum cardholder,” Childs says.

A Hard Lesson for Small Businesses

Childs eventually won in court. The case, Paramount Investigative Services, Inc. vs. Zort, Inc., drew the attention of the Department of Justice and the FBI, and several people were charged and arrested, including law enforcement officers tied to the case. But the victory came only after months of financial strain and sleepless nights wondering if his firm would survive. “I barely held on,” he admits.

The lesson is one he now shares with every small business owner he can reach: avoid accepting American Express, especially for large retainers. The convenience and prestige are not worth the risk.

“Small businesses like mine cannot absorb a sudden reversal of tens of thousands of dollars,” Childs says. “You think you are dealing with an elite client, but in reality you are handing them the power to destroy you with one click or phone call to their credit card company.”

What Every Small Business Owner Can Do

For Childs, the solution has been to change the way he accepts payments entirely. He now uses secure payment links that force clients to enter their own details and confirm charges, creating a digital footprint that banks respect more than a manual entry. Combined with refusing AMEX, it has protected his firm from a repeat of the $50,000 loss that nearly ended his business.

The advice is blunt but lifesaving: if you are a small business owner, do not take AMEX for large transactions. In practice, that often means anything above $5,000 to $10,000; the kind of payment that covers a retainer, a major service contract, or several weeks of work. The system is not built to protect you. One swipe can erase months of effort. As Childs puts it, “For their top cardholders, it is literally like swiping left on a dating app. That is all it takes to undo everything.”