American Express pays you to shop small business

By , CardRatings contributor
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Small Business Saturday may not have the name recognition of Black Friday, but it's getting there, especially now that American Express is paying consumers $25 to spend money on this eminent shopping day.

If you've heard of Small Business Saturday and wondered what all the fuss was about, then you're in luck. All of the questions you likely have are answered here.

When is Small Business Saturday?

This year it's on Saturday, Nov. 26. It's the day after Black Friday, possibly the biggest shopping day of the year, and two days before Cyber Monday, the day that traditionally has the most online deals presumably to take advantage of all the shoppers who tend to shop online after striking out at the stores over the weekend.

What is Small Business Saturday?

It is a concept championed by several big-name companies--Facebook, Google, FedEx, Verizon, Yahoo and most notably American Express. The idea is that the day after Black Friday, when the malls are mobbed, if you're still coherent enough to shop on Saturday, you should offer up some TLC to the small businesses of America. Yeah, you know, the little mom and pop shops that tend to get overlooked because they aren't opening up at 10 p.m. on Thanksgiving night with some 75-percent-off deal.

American Express OPEN, the division of American Express that serves small businesses, created the idea last year. Their concept was that the Saturday after Black Friday should be a day when people should go equally crazy with their spending at boutiques, mom and pop hardware shops and all of the other numerous small businesses out there that make up the American landscape and don't receive as much attention and glory as the malls and big box stores.

What was that about $25?

American Express will give you a $25 credit on your statement for making a qualified purchase on Small Business Saturday, provided (this is important) that you register an eligible American Express credit card at the website, www.facebook.com/shopsmall, and follow the instructions. And then you have to use your registered eligible American Express card at a small business on Nov. 26, 2011.

And keep in mind, if you go to 18 different small businesses and spend like mad, that's wonderful--if your goal is to help the economy, and that's the thinking behind the holiday--but you'll only get $25 credited on your statement, and not $450 (18 stores multiplied by $25).

You can also learn more by visiting SmallBusinessSaturday.com.

And you can use your other credit cards to shop on Small Business Saturday

Nobody will complain if you use your Discover or MasterCard or what have you to shop at small businesses on Nov. 26. As noted, the whole idea behind Small Business Saturday is to help local economies and small business owners (and their employees). To pick a city at random, in Louisville, Ky., WLKY-TV reported that according to Louisville's Small Business Development Center, for every $100 spent at a giant department store like Target or Walmart, $15 of that stays in Louisville. For every $100 spent at a small business, however, $47 stays in Louisville. Similar scenarios play out around the nation.

As SmallBusinessSaturday.com points out, "When we all shop small, it will be huge."

Some bigger companies are promoting the holiday, too

And as Small Business Saturday becomes more popular, you will likely find more and more deals at small businesses, beyond American Express's $25 gift, so keep an eye out in your local paper for sales. And seriously savvy shoppers will may want to start thinking ahead and planning for Small Business Saturday for next year as well.

Earlier this month, FedEx quickly gave out $1 million in Shop Small American Express gift cards to its customers (worth $25 apiece). They announced that deal on Nov. 1 and the 40,000 cards that they gave away were gone within an hour.

The way things are going, Small Business Saturday could eventually be as popular as Black Friday and Cyber Monday. And then, their week-long, post-Thanksgiving domination almost complete, retailers can begin thinking of ways to squeeze more money out of consumers' wallets on the lesser-known holiday known as Completely Broke Tuesday.

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