You may have seen the recent promotions for a national event scheduled for the Saturday after Thanksgiving branded Small Business Saturday. The idea is to highlight the importance of small business to the American economy, keeping up with the focus given Black Friday (for big box retailers) and Cyber Monday (for online retailers).
Promotion of the event has gained critical mass, with feature articles and mentions in national news outlets, and over ¾ million accumulated Facebook fans. Although the effort to identify and honor small businesses is worthy, having a national corporation like American Express carrying the banner is a bit suspect.
“Small Business Saturday” in itself is a worthy idea that makes people think about the impact their dollars spent make within their local community. The significant impact of buying products and services from local sources is well documented, with several studies concluding that 2-3 times more money stays in a local economy when consumers shop at a locally owned business rather than at a nationally owned chain.
Many of us in the Grand Traverse region are familiar with the popular Taste the Local Difference campaign spearheaded by the Michigan Land Use Institute and other local leaders that has successfully increased awareness of the local agriculture and food products. The idea of Small Business Saturday campaign is similar, but this time the catalyst is a national corporation and for some small business owners, this is the rub.
For years American Express has been known as the company charge card that many small businesses could not afford to accept. The merchant services fees (paid by the business so it can accept the credit card from its customers) that American Express has charged over the years are typically a percentage point higher than their competitors at Visa and Mastercard. Many smaller retailers, restaurants, and service businesses have had to either accept the higher percentage rate or alienate their customers by not accepting the card at all. The percentage or more difference (and its impact on business costs) has been a source of conversation and controversy in Northern Michigan small business circles for decades.
In its defense, American Express is leading the charge with Small Business Saturday and it can be argued that increasing awareness in the critical role of small businesses has to begin somewhere. In addition, American Express is kicking in huge money for promotion of the event, offering $25 statement credit for their customers when they shop in an independently owned business on Small Business Saturday, and donating up to $500,000 to a great program called Gifts to Girls Inc. that helps girls learn about entrepreneurship as a career choice.
So if American Express is the one to get the ball rolling, then so they should be applauded. It’s important to remember and celebrate Small Business Saturday on November 28th, but also remember that shopping locally from your community friends and neighbors is a year-round mindset not just a one day event.