Sandwiched between Black Friday (the day bricks-and-mortar retailers hope the red ink on their books will turn black)and Cyber Monday (when URL-ready retailers hope customers will click their way to the biggest online shopping day of the year) a new event faced Americans this year: Small Business Saturday. 


The campaign’s logo features a small-town Main Street in red, white and blue, complete with vintage lamp posts, families holding hands and passersby clutching shopping bags. Small Business Saturday, Est. 2010, the copy read.


It was straight-up Americana: Come and shop mom-and-pop. The only problem is, Small Business Saturday is a marketing gimmick of American Express and its small-business unit, American Express OPEN. And it’s one of the more cynical marketing campaigns in recent memory, given that American Express is the target of a federal anti-trust suit alleging the company makes it difficult for small businesses to operate.


AmEx played its purported love of small businesses to the hilt, running full-page print ads, radio and TV spots and a social media campaign that registered more than 1 million fans on Facebook, and thousands of Tweets. The campaign had the backing of visitors’ bureaus in six cities, as well as the National Trust for Historic Preservation, which sponsored events in three other locations.


The anti-trust suit, filed Oct. 4 in U.S. District Court, was joined by the attorneys general of Connecticut, Iowa, Maryland, Michigan, Missouri, Ohio and Texas. The suit named Mastercard and Visa as plaintiffs too, but those two companies announced they’d settled with the government simultaneous to the filing.


The issue, according to the suit, is this: AmEx charges some of the highest “swipe fees” in the industry – about 2 percent of the total purchase price. The company’s practices put small retailers in a retail Catch-22, because merchants accepting AmEx are not allowed to suggest customers use another card, nor are they allowed to offer discounts or information about card costs. If they do, they risk being cut out of the AmEx network. 


AMEX PRACTICES PUT SMALL BUSINESS IN A RETAIL CATCH-22.


Not only do retailers pay more, but so do customers. Assistant U.S. Attorney General Christine Varney, head of the anti-trust division, said if the suit succeeds, it will give merchants more freedom to benefit their customers, because the restrictive rules restrain competition among credit-card networks.


AmEx is unlike its Visa and Mastercard brethren not only in that it issues its own cards; the company resolutely refuses to settle the suit, which some experts have called “rock solid.” According to a piece in The Washington Post, AmEx says it negotiates its own fees directly with merchants, and those fees pay for services and rewards that allow it to cater to the higher-income clients retailers desire.


Are they delusional? On the one hand, they’re beckoning shoppers to support “the shops and restaurants that employ our neighbors… the businesses that are the heartbeat of our communities and local economies” (according to the ad). At the same time, they’re saying to those businesses, “We’re going to charge you the highest rates of any card. And we’re not going to let you tell customers they have other options.”


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AmEx got just one thing right: We do need to support the shops and restaurants that employ our neighbors. But why not do it without prodding from the Evil Empire? One problem is, there are fewer of those places to visit. Vacancy rates around South Main Street in Salinas and Monterey’s neighborhood retail centers hover at about 10-11 percent. Michael Schoeder, managing partner at the Monterey office of commercial real estate firm Cassidy Turley/BT Commercial, says that’s about double the norm for the region; usually, it’s below 6 percent.


Oldtown seems to be getting hammered these days. Over the Thanksgiving holiday, tiny Theo’s Cheesesteaks on Gabilan Street closed for good. The owners of Lumpia Hut on the 300 block of Main Street shut their doors a few months back for everything other than catering. Across the street, the furniture store Affordable Décor is having its everything-must-go sale. 


I recently ran into the owner of an Oldtown food business late on a weeknight. He usually doesn’t close the shop at night, but it’s become a necessity because he’s taking so little money home that he had to let staff go. “It’s pretty grim these days,” he says.


So by all means, keep your neighbors in mind when you’re spending this holiday season. Instead of clicking, walk or bike, or hell, drive to someplace local and quaint. And when you pay, keep AmEx and the anti-trust suit in your head. 


Mary Duan is the editor of Monterey County Weekly: Reach her at mary@mcweekly.com.

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