This Saturday marks the fourth annual “Small Business Saturday.” It’s part of a campaign by American Express to encourage Americans to shop at locally-owned brick-and-mortar businesses the day after Black Friday, when the masses typically swarm big-box chain stores on the hunt for cheap flat-screen TVs and other once-a-year bargains.
Sounds like a great idea, right? AmEx must really care about supporting small independent businesses. Or so they’d like you to believe.
In reality, AmEx just wants consumers to shop more, and pay with their AmEx cards when doing so. That’s because every time you pay with AmEx card, or any other credit card, the credit card company (as well as the issuing bank) makes money. And where does that money come from? The merchant, in the form of transaction fees, amounting to 3% or more of the purchase total, in addition to flat fees of 10 cents or more. And don’t forget the millions credit card companies make in interest and fees from their own customers.
Of course, AmEx is looking to make a profit, just like any other company. But if AmEx truly cared about supporting small businesses, why not remove or lower its transaction fees, if only for Small Business Saturday? That way, small business merchants could encourage their credit card-happy customers to pay with AmEx that day to save them money on transaction fees. More likely than not, many customers would choose to use AmEx over another card, and AmEx would still make money off all of the customers who would end up paying interest on their purchases. And AmEx would come out looking like a small business champion, rather than a leach attempting to maximize its own profits under the guise of a feel-good campaign.
We don’t mean to sound overly cynical – we wholeheartedly believe in the message of Small Business Saturday, and we’re glad AmEx is making people more aware of the benefits of shopping local. We’ll certainly be patronizing our favorite local independent shops that day and encouraging others to do the same. But we’ll be paying in cash, or with Dwolla if the merchant accepts it.
We aren’t fans of companies who do good with one hand and do bad with the other, and we can’t help but feel like that’s what AmEx is doing with the Small Business Saturday campaign. As an aspiring B Corp, we look to Patagonia, method, and other companies that do more than just “talk the talk” when it comes to corporate responsibility as role models for how to run our business. So while we’ll continue to spread the word about choosing local independent businesses over large chain corporations as much as possible, we won’t sweep the negative impact credit card companies have on small businesses under the rug.
This Small Business Saturday, please make a point of supporting your local independent businesses. Just don’t forget that how you buy is just as important is where you buy.