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This is a guest article by Emily Guy Birken, author of The SAHMambulust. In this article, Emily explains and reviews the 3/50 Project, a movement designed to boost local economies.

The presents have been given out, the wrapping paper has been cleaned up, and Black Friday, Cyber Monday, and Small Business Saturday from American Express are just distant memories. Now may not be when most people are thinking about shopping, but it’s the perfect opportunity to commit to really help small businesses in your area for 2012. And what do small businesses need more than anything else? Loyal customers.

This is the basis of The 3/50 Project, spearheaded by Cinda Baxter, a retail consultant, professional speaker, and former retail business owner. Back in 2009, after hearing several reports about how patronizing local brick-and-mortar stores could help the economy, Cinda wrote about the achievability of economic recovery if we all simply commit to being good customers to independent retailers.

BakeryFrom that blog post, a movement was born.

The idea is very simple. Pick three local, independently owned businesses in your area — businesses that you would be sad to see shut their doors — and plan on spending $50 total per month among those three businesses. That’s it. The movement does not ask you to spend more than you already do. Just plan on $50 of your monthly expenditures going toward local businesses.

It is important to note that sometimes you will end up spending a little more money by purchasing locally rather than at the neighborhood box store or online. However, paying above bargain-basement prices means that you are also helping your local economy — a fairly easy trade-off in most budgets.

What’s exciting about making this commitment is the fact that it could contribute to our financial recovery. According to the statistics provided by The 3/50 Project website, every $100 spent in local brick-and-mortars results in “$68 return[ed] to the community through taxes, payroll, and other expenditures. If you spend that in a national chain, only $43 stays [local]. Spend it online, and nothing comes home.” Imagine the boom to the economy if everyone simply chose to spend some of their money locally.

The 3/50 Project is specific in how it defines an independent business. Though a franchised store may have a local owner, it is not one of the local businesses that The 3/50 Project is aiming to help. As a franchisee, the owner of a fast food restaurant, for example, can benefit from national ad campaigns, preferred vendor lists and large-scale price negotiations. This project is looking to help the independents who are relying on their own unique brand, pay their own expenses for marketing, rent and other operating costs, and operate from a storefront, rather than their home, a kiosk, or the internet. The full description of what constitutes an independent retailer is available here.

Deciding to try The 3/50 Project in your community does not mean that you have to give up your Starbucks coffee or your cheap groceries at Wal-Mart. There is room for national chains, internet shopping, and local stores in your commitment. This is an opportunity to be mindful about your spending, which should always be a goal of responsible personal finance. Why not help your local economy while you’re making savvy spending decisions?

Photo: Calgary Reviews
3/50 Project

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I’ve avoided writing about Black Friday this year. In the community I follow, promoting the day after Thanksgiving for shopping has gotten completely out of hand. I wrote an article for PC World a few years ago, The Insider’s Guide to Black Friday Bargains, where the tips are still relevant for today’s shoppers. I’m not going to write a new article every year about how to find the best Black Friday deals.

As if Black Friday weren’t enough of a marketing scheme, a few years ago consumers were blessed to receive Cyber Monday, yet another day of hype encouraging people to buy more. I’m not always anti-consumerism, but I just find every year’s increased holiday sale hype, designed as a last-ditch, end-of-year effort to make up for poor sales since January 1, annoying. Doorbusters, bait-and-switch, and worst of all, and crazed Wal-Mart shoppers who are willing to kill others just to be first to grab some sale item that will be worth a tiny portion of its sale price in five months, make me embarrassed to be an American consumer.

American ExpressThe opposite approach is to put faith in Buy Nothing Day. The message of Buy Nothing Day is good, but like any temporary boycott, it just time-shifts spending; what you don’t spend on the day after Thanksgiving you’ll likely spend the next day. And if a sale expires, you’ll spend more.

The worst thing to come out of the holiday hype is “Small Business Saturday.” (Let’s just stop naming the days following Thanksgiving, also known as Turkey Thursday.) This is American Express’s effort to get consumers to patronize local stores in favor of national chains. On the surface, this isn’t a bad idea. Support business owners in the community by visiting smaller retail establishments who otherwise have a difficult time competing with large box stores like Best Buy, Wal-Mart, Target, and Home Depot. Your neighborhood appliance or hardware store generally charge more money for the same products offered by national chains because small stores have little leverage to negotiate with wholesalers. Working with a small business based in the community you live, having a friendly face who can help answer your questions, and building a relationship with a business owner might be strong enough reasons to settle for a higher priced item.

This is coming from American Express. Many small business owners simply can’t afford to accept payments using American Express cards. It costs more money for a retailer to accept most American Express cards than most Visa or MasterCard credit cards. When you do use your American Express cards at a small business, you are not helping the store as much as you would if you were to pay with cash. American Express interchange fees can take an unhealthy bite out of a small business’s profits. Also, unlike Visa and MasterCard, who generally split merchant fees with banks that issue their cards, American Express cards are generally not issued by third parties, and the company keeps the entire interchange fee.

The “Small Business Saturday” campaign was not created for the good of the overall economy. American Express offers this message, “The 2nd annual Small Business Saturday® is a day dedicated to supporting small businesses on one of the busiest shopping weekends of the year,” but the day supports American Express, which is not a small business. Through this campaign, American Express is offering small businesses that accept their cards to prominently display an advertisement that offers a $25 credit to any customer who uses an American Express card to purchase items totaling $25 or more at the location. There is little in this campaign other than self-interest and self-promotion on American Express’s part.

Is this bad? It’s hard to say. If you want to do your part to support local businesses that are in danger of closing partly due to the high prices credit card companies charge, shop there but pay cash. Forget about the 1% cash back or less you can earn, paid for by the small business owners. The $25 credit in the offer doesn’t support small businesses because this isn’t extra money that can be used to purchase more in a store. It’s a statement credit, designed to thank card holders for using American Express and requiring retailers that accept the cards to pay more to AmEx through fees.

American Express is, thanks to capitalism, allowed to promote almost anything it likes in order to increase profit. That’s how corporations compete, build value for shareholders, and help upper middle class households stay upper middle class and wealthy households increase their wealth. The company reports that small businesses saw an increase in sales due to last year’s Small Business Saturday campaign (but note that they didn’t see the same large increase in profits). Look past the marketing messages at who is most benefiting from this campaign.

When the sun goes supernova and engulfs the Earth, marketers will promote the event as the hottest party since the big bang.

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When a sales approach reveals itself to be significantly profitable for a company, you can bet those who run that company will want to expand that approach. Last year’s “Black Friday” day-after-Thanksgiving sale on Amazon.com was popular, and this year the major online retailer is extending the event throughout the week leading up to Thanksgiving, and offering publicized deals throughout the entire month of November, counting down to the start of “Black Friday Deals Week.”

The Black Friday Deals Week Countdown features electronics, home and kitchen, and jewelry, but Amazon has deals throughout all categories. The featured deals follow the style of Amazon’s “Lightning Deals,” where the retailer offers a usually deeply discounted item every several hours in limited quantities and for a limited time. The deals are not announced ahead of time, so in order to take advantage, shoppers would need to check Amazon.com often.

Shopping online beats running around from store to store on Black Friday, running the risk of being trampled by crazy shoppers. On the other hand, you may miss out on a retailer’s best doorbuster-type deals if you don’t get out of the house. Some companies take advantage of the fact that this is the one time of the year that a large population of consumers are obsessed with finding great deals, and it’s easy for retailers to present an offer as a once-in-a-lifetime discount for shoppers who haven’t properly researched their desires. An event like Black Friday also open the opportunity for retailers to take advantage of the impulse reaction, leading people to buy what they don’t need simply for the feeling of scoring a great deal.

Perhaps I’ve become lazier over the last few years. Except in a few specific situations, namely photography equipment, I’ve found that Amazon.com consistently offers lower prices on the items I find myself needing or wanting most often. I often don’t bother to shop around unless it’s for a major purchase. If Amazon’s price ends up being slightly higher, I don’t worry too much. Thanks to all the money I’ve saved over the past decade, my overall savings compared with shopping at retailers like Best Buy and Circuit City more than make up for the difference.

How closely will you monitor Amazon.com’s Black Friday Deals Week Countdown? I might visit the site several times a week to see what the trends are. I haven’t organized a shopping list for the holidays yet.

Related: Christmas gift ideas under $100 and best holiday toys for 2011.

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Thanks to all the Consumerism Commentary readers who commented or emailed me about the auditions for staff writer. I’d like to welcome Kelly Whalen, a writer whose primary website is The Centsible Life, to the Consumerism Commentary team! Kelly will be providing one article a week starting this Thursday. Tom Dziubek and I will speak with Kelly on a future Consumerism Commentary Podcast so subscribe now to learn more about our new contributor.

Facebook giveaway

This week, Consumerism Commentary will be giving away a copy of Excuse Me, Your Job is Waiting: Attract the Work You Want by Laura George. I reviewed the book here. The book is a few years old but it is a great resource for today’s economic conditions. In order to be entered in the giveaway, you must be a fan of Consumerism Commentary on Facebook.

Simply being a fan gives you one chance to win, but if you write on Consumerism Commentary’s wall to leave a tip for us, you will quadruple your chance to win. You must be a fan and leave your message by Friday, December 11 to qualify.

Best of Consumerism Commentary, November 2009

The Consumerism Commentary Podcast featured a number of great guests in November. This past month we discussed gift cards with Jim Sharvin, CPA, social and peer-to-peer lending with the CEO of LendingClub, finding a job with headhunter Nick Corcodilos, frugality with author Sharon Harvey Rosenberg, and investing for retirement with author Dan Solin.

Join the community

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How to Spend Smarter This Holiday Season

by Kelly Whalen

Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer. This ... Continue reading this article…

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Ending the Week

by Flexo

It was a bit of a light week for me in terms of blogging due to my traveling and visiting with family. It’s time to get back into the swing of things. Look for a book review later this week, as well as an announcement about the winner of the latest giveaway. Here’s what has ... Continue reading this article…

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