Walgreen’s Decides to Keep Taking AmEx Cards After Cutting New Deal

Pharmacy giant Walgreen's Co., which a month ago announced it would stop accepting American Express cards effective today, has reversed itself, announcing it will continue taking AmEx cards after reaching a new multi-year deal with the card company. Terms of the new arrangement were not released. “We were able to reach a new agreement [with American Express] so that it makes sense for us to keep accepting their cards,” says a Walgreen's spokesman, who refuses to give further details. Last month, Walgreen's said it would cease accepting AmEx because the higher discount fee the card company was charging relative to other card brands was not justified by higher transaction tickets (Digital Transactions News, Dec. 15, 2004). The Deerfield, Ill.-based company, which is the nation's largest drugstore chain and ninth-largest retailer, also accepts Visa, MasterCard, and Discover. Walgreen's, which has accepted AmEx for eight years, has said the rate it pays to accept AmEx cards has not changed in that time, but that at the same time the card accounts for a small fraction of total card transactions. Walgreen's operates 4,681 stores in 44 states and Puerto Rico. Its decision to stop taking AmEx was to apply to these stores as well as to walgreens.com, Walgreen's Mail Service, Walgreen's Home Care, and Walgreen's Specialty Pharmacy.