Please Spend More Than $10 On Small Business Saturday

One of the best marketing plans I have seen is American Express's Small Business Saturday.

In 2010, in the midst of the economic recession, American Express decided to declare the Saturday after Thanksgiving, Small Business Saturday. They did more than make a declaration and some advertisement, they put money behind the program. American Express offered a one-time $25 statement credit for anyone who registered their Amex card and made a $25+ purchase at a participating small business. The program was a huge success that American Express brought it back in 2011. Why would American Express give away free money? Well, its all for good publicity.

Typically, small business are not fans of American Express. Of all the credit card providers, American Express has been reported to the highest swipe fees.  I say "reported," because American Express strongly pushes back from assertions that its swipe fees are higher than Visa and Mastercard. However, speaking with family members with small business, they confirm that American Express's fees are higher than other providers. I have seen this chart a few times:

Regardless of the what the fees actually are, American Express leaves a bad taste with small businesses owners. Small Business Saturday promotion has slowly started to make small business owners warm up to American Express.

2013 will be the third year of this Small Business Saturday promotion. This year, American Express is only offering a $10 statement credit compared to the $25 credit offered the past two years.

The decrease in the statement credit from $25 to $10 is major. When first announced, many people in the community were unhappy. Why? Its $15 less of merchandise that they get. You see people game the system by purchasing exactly $25 worth of merchandise, just enough for the credit. While not against the terms and conditions of the program, it is against the idea behind the program.

With the decrease to a $10 credit, I fear that small business owners might lose money on purchases. Say Joe Smith visits XYZ Small Business on Small Business Saturday. Joe Smith has his new Amex, that he got, because X blogger told him to apply, and heard that he can get $10 free merchandise by swiping his American Express card. The problem with the lower statement credit is a possible lower profit margin.

Assuming a $10 purchase, a 3% American Express swipe fee eats $0.30. Add in the processors swipe fee, which typically a quarter (.25) or two (.50). Take the higher end, the use of the credit card costs $.80 or 8% of the purchase price. Now lets look at a $25 purchase, 3% = $.75. Add in the $.50 processor fee and we are at $1.25 or 5% of the purchase price. If Joe Smith picks an item with a small profit margin, Mr. Small Business owner might be in trouble with the lower price point.

Yes, this is an extreme example. My analysis could be completely off. I don't have an MBA or even a BA in business. If my analysis is completely off, please let me know. No hard feelings. However, I have a feeling some small business owners might be doing the math like me. This may result in some small business owners might skip publicizing Small Business Saturday.

The reason why I wrote this article is to encourage people to think about spending a little more than $10 on Small Business Saturday. Spending an additional couple dollars on your purchase, maybe the difference of a profit, loss or break even for Mr. Small Business Owner.

Registration for Small Business Saturday opens on November 24. To register, bookmark this website.

Are you planning on participating in Small Business Saturday?
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AMEX Small Business Saturday - Who I Supported!

Saturday was a super bus day for me. I had to go to work, because my boss is on vacation. Normally, no big deal, but I had never tried to get to my office building on a weekend. It turned out to be an adventure involving two buses and a cab. (Remember, I live a car free diet). After spending a few hours preparing for the upcoming week, I headed home and only at that point I remember its Small Business Saturday.

Yes, I know I made a post about it, but the transaction takes 2 steps. 1) Registering and 2) Making a purchase. I wonder how many people registered for the promotion and forgot to make the purchase. Well, I turned out not to be one of them, because I took the metro one extra stop to a small restaurant, Rabbit Grill. Rabbit Grill is located at the Clarendon Metro stop, directly across the street and around the corner.

In full disclosure, I have never eaten at this restaurant. I have always wanted to, because it looks very cool inside.

Also, the restaurant's menu looks amazing too. (website menu here)

Sandwiches, salads, and entrees all under $20, and not the typical sandwiches or salads either. The menu makes my mouth water.

However, I had dinner reservations that night and was not hungry. I remember reading Mommy Points saying she used her $25 credit on gift cards, last year. That's what I did with my $25 credit, I bought a gift card for a future meal. I will write a review of the restaurant, when I eat there.

Ok, so this is a points blog and you are wondering whats the angle on this deal. Well, I double dipped on this promotion. (Whats a double dip? Its when you earn two things for doing one thing). On this deal, Rabbit Grill is a member of Restaurant Rewards, so by buying the gift card, I also got Hilton Honor points. 

$25 = 200  Hilton Points....free points by getting free gift card! (Double Dip Baby!)

To be successful in this game, one needs to think about points at every transaction. 

I hope you had a fun Small Business Saturday!!!

AMEX Small Business Saturday (Limited Enrollment)

I know this has been blogged about to death. I told myself that I was not going to write about it. However, after the nth time talking to family and friends about Small Business Saturday and hearing the small question, "What is Small Business Saturday?" I decided it was time for a quick post.

A little back story:

In 2010, AMEX decided to it was time to support the Small Business that make up the fiber of the American economy. The idea was that typically the Friday after Thanksgiving, known as Black Friday, is the start of the high shopping season and increased revenue for the big stores. AMEX declared that the Saturday after Thanksgiving, to be further known as Small Business Saturday. 2010 was the depth of our economic recession and small business's were failing at a rapid rate. AMEX decided to give a $25 statement credit for AMEX members who make a purchase on Small Business Saturday at a participating small business. The program was a HUGE success and gave a ton of great publicity to AMEX (Many small businesses dislike AMEX because of their high surcharges, so it was also a great way of getting some goodwill from small business owners).

Ok, back to the promotion.

If you have an AMEX credit card, not a prepaid card or corporate card, you can are eligible to participate.

Here are the simple steps to participate:

1)  Go to this website to register. You will have to enter your credit card number. Some people have 
      reported registering multiple cards. The program has a limit, but as of Thanksgiving evening at 9pm,
      my friend was able to register. You have to register by 11:59PM MST on November 24, 2012.

2)  After registering, you will receive an email confirming you are registered. If you don't get this email, go
     back to the website and retry to enter the card. If you are registered, the website will let you know that
     you are registered.

3)  Pick a small business to shop at. You can see a list here via zip-code.

4)  Shop! (My favorite part!!!) Use the enrolled AMEX card to spend $25 or more in a single, in store
      transaction at a small business on November 24th. You have to spend $25 or more to get the $25
      statement credit.

5)  Smile. When you get the email that says you have qualified for the $25 credit. I usually get the email
     within an hour of making a purchase.

This Saturday I will be out shopping at small businesses in Arlington. I will make one $25 purchase with my AMEX card and then I will make the rest of my purchases with VISA/Mastercard branded cards, the fees are cheaper on small business!!!