Small Business Saturday
Is it a scam? (No.)
The Saturday after Thanksgiving is celebrated in the United States as “Small Business Saturday.” But is it the wholesome, grassroots “buy local” movement it appears to be?
While small businesses may offer their own Black Friday deals, that particular celebration of capitalism is dominated by major corporations and big box stores. In its heyday, people literally died for lower prices on TVs. This year, TikTok is filled with videos proving that the Black Friday deals are mostly fake, yet everyone still thinks that it’s essential to kick off the holiday season by sweating in a mall.
This year especially, a lot of people are really embracing Small Business Saturday and encouraging other holiday shoppers to look to small businesses and creators for their gift lists. And that’s awesome!
But Small Business Saturday wasn’t founded as an anti-capitalist crusade, nor simply as a warm fuzzies moment for buying local. It was really market differentiation for a major financial corporation. Whomp whomp.
Until a 2004 antitrust ruling, Visa and MasterCard prohibited financial institutions who issued their cards from also issuing American Express cards. This gave them a massive, massive leg up in the market. Even after those rules were struck down, it still took the brand years to gain footing with a lot of those institutions. Fewer cards meant fewer users. For this and a variety of other reasons, American Express has generally had higher merchant fees, making the card more costly for businesses to accept – which resulted in many not accepting them at all. (The financial crisis of 2007-08 was also not exactly a win for AmEx’s relationship with businesses.)
So enter #SmallBusinessSaturday in 2010. To foster goodwill with many businesses that did not accept their cards – and to promote their cards geared toward small business owners as well as consumers – American Express launched a campaign to encourage holiday shoppers to look at local brick-and-mortar stores. They spent millions of dollars worth of advertising (a lot of it on social media and in the print publications owned by the brand) to spread word of the concept. To add value for their member cardholders in the first year, AmEx donated Facebook advertising to small business cardholders and offered rebates for new customers. This year, they are offering a $1 donation for each qualifying SBS purchase to the “U.S. Chamber of Commerce Foundation to support recovery efforts for small businesses impacted by Hurricanes Helene and Milton.”
This was not the company’s first foray into cause marketing. One of their earliest came in 1983. They pledged to donate one penny for every purchase made with an American Express card toward restoring the Statue of Liberty; the 28% increase in card user spending resulted in millions in profit for them and $1.7 million to the restoration project.
Anyway, their marketing budget for Small Business Saturday has dwindled after its first few years. And why not? Social media users (as well as traditional media outlets) perpetuate the name with very little encouragement from AmEx. Meanwhile, American Express gets to take credit for all of the attention small businesses get. And, since the phrase is trademarked, they could sue if Visa or MasterCard attempted to get in on the action – making them look a bit callous towards small business. A win/win.
If you think this post is meant to squash the warm fuzzies you felt about sharing your favorite small businesses or to discourage you from celebrating Small Business Saturday… no way! I think it’s a worthwhile movement and an important one. If we’re also incidentally propping up the credit card company that accounts for just 4.61% of transactions worldwide (versus Visa’s 38.73% or MasterCard’s 24% share in 2022), I’m not mad about it. Small businesses deserve our love every day, but especially during the holiday shopping season.