First off, I’m glad Small Business Saturday (no, that’s not a link, I’ll get into why in a second) has come into existence and hope it helps make people aware of the importance of small, local business that contribute to more than the economy.
The idea of this video is incredibly appealing.
And while it is, of course, a little self serving for a small business to promote shopping at small businesses, we think supporting the companies that donate to schools, sponsor sports teams and generally make it nice to live in a community is worthwhile.
But some part of me still can’t help but have a bad aftertaste. While it looks like the U.S. Small Business Administration has a role, much of that role has been outsourced to the credit card company American Express.
For anyone who doesn’t run a company that processes credit cards, American Express is the company that charges small businesses the highest fees for transactions made with its card. Its rates are so high that we are continually re-thinking our decision to accept AmEx at all.
Credit card swipe and processing fees run between 2 and 3 percent – doesn’t sound like much but it adds up to $50 billion a year – going toward credit card companies’ profits. This article on swipe fees and credit card processing is about the slim margins at restaurants, but the math is the same for many small businesses.
If you’d like an idea of what it costs merchants when you use a credit or debit card, check out The True Cost of Credit.
Getting back to Small Business Saturday…
The program’s AmEx website (there’s the link) lists FedEx, Microsoft’s Bing, Facebook and Clear Channel as its headline supporters – hardly bastions of the small, local business movement.
Other “Corporate Supporters” include the very companies that are putting many small businesses out of business. Places like: 1-800-Flowers, AT&T, DELL, FTD, Groupon, Newegg, Staples, OfficeMax, Vistaprint and Vacation.com – among many, many others (see the whole list by clicking on “Supporters” on the Shop-Small website). These are some of the very businesses that are putting local small business like florists, phone providers, stationary shops and printers out of business.
So there’s the fact that the program is basically run by a credit card company that, in my view, overcharges small businesses and is sponsored by big businesses that have forced small ones to close up shop. That’s where the bad aftertaste is coming from. Supporting small business is a wonderful idea but next year maybe we can all do a better job at forking over a smaller slice of the pie to big businesses.
Don’t get me wrong…