Swooning over Small Businesses

As we take the time to be thankful for the amazing people in our lives, we also want to take time to thank the amazing small businesses in our community! Wilmington has a wonderful array  of local businesses that give the town character. Businesses like Freaker USA, Flaming Amy’s Burrito Barn and Bowl, Blue Moon Gift Shops, and Carolina Farmin’ help make Wilmington the city we know and love. These are just a few examples of small businesses that give Wilmington its character and charm. With restaurants like Flaming Amy’s Burrito Barn and Bowl, we as consumers are instantly attracted to the unique decor, plethora of food options and friendly employees. These businesses thrive because of our local support.

Small businesses help build communities. This fact sheet from WWAY News gives six reasons as to why it is important to shop at a local small business rather than a chain store. One of the most striking statistics that is presents is that for every $100 spent at a local business, $68 stays within the community versus $14 when spent at a national chain and $0 returning when the money is spent online. Additionally, small businesses generate more tax revenue per dollar which helps to keep our taxes lower. These are just a few of the reasons we think our Wilmington businesses need a huge thank you.

Luckily, we aren’t the only people who recognize what small businesses can do. Three years ago, American Express created Small Business Saturday. The holiday is celebrated on the Saturday between Black Friday and Cyber Monday to help bring some of the holiday traffic back to the local stores. Sounds great, right? We thought so too, at first. After looking into Small Business Saturday and American Express, the issue isn’t as clear cut.

As a brand, American Express doesn’t have a good reputation with small businesses. Even with the increased number of American Express card holders, many small businesses take any credit card other than American Express. Why is this? This NY Times blog offers an answer: American Express charges small businesses a higher interchange fee than any other credit card company on the market. This means that when two people buy the spend the same amount of money, but one customer pays with Visa and the other with American Express, the business will make less money off of the latter sale.

The question then becomes: why would American Express want to create a day to celebrate small businesses when small businesses don’t want to do business with American Express? The answer is pretty simple: by offering American Express cardholders incentives to shop locally on Small Business Saturday, the small businesses who do take American Express will see an increase in sales. Thus the small businesses who don’t accept American Express will lose out on this holiday, and no small business wants to miss out on the opportunity of a huge day of sales. American Express is getting small businesses more business by forcing them to accept the credit card they hate the most.

There are still other factors to consider when looking at this holiday. American Express offers an online marketing tool kit for small businesses who agree to participate. For the consumers, the incentive program that American Express offers is as follows: spend $25 at a local business on Small Business Saturday with your American Express credit card and receive a $25 statement credit. Now, there’s no denying that is quite generous of American Express. Cardholders can register every American Express card they have, and every card they use is eligible for an individual credit back. Unfortunately people are working to take advantage of this system at a cost to the small businesses. Check out this blog that informs people on the best way to get the most credits back. One tip suggests splitting one purchase between several American Express cards. The problem here is that for each swipe of an American Express card, there is an interchange fee the small business must pay. These multiple mini-transactions can easily drive up the costs for the small business.

After all of the information we discovered, we were left questioning the ethics behind the creation of this holiday. We love the idea of an entire day devoted to celebrating small businesses, but we get a little defensive when big companies like American Express try to take advantage of our favorite local places. So this year we will be celebrating Small Business Saturday, just not the way American Express intended us to. Even though some of our favorite small businesses don’t accept American Express, we still plan on celebrating their businesses and helping them to continue to thrive within our Wilmington community!

– Alexandra HussCaroline MerrillAlyssa MorrelloLauren Van TrigtDann Williams

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One thought on “Swooning over Small Businesses

  1. I found this blog very interesting, not only because I celebrated Small Business Saturday but because I did not know a lot of background information behind this new holiday. The fact that American Express started this event was very confusing until explained that it all boils down to American Express forcing small business to accept the credit card that is promoting their business in the first place. American Express’s technique is intricate in the sense that they are promoting all small businesses, the only businesses that are less likely to use them. When these customers come in to support their local business and can’t use their American Express, then the company starts thinking about changing their payment options. Thank you for this blog it was very insightful!

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