HomeMy WebLinkAbout2020-09-01; City Council; ; Sponsorship of Gift Carlsbad Shop Local ProgramMeeting Date September 1, 2020
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Laura Rocha, Deputy City Manager
laura.rocha@carlsbadca.gov, 760-602-2415
David Graham, Chief Innovation Officer
david.graham@carlsbadca.gov, 760-434-5992
Subject Sponsorship of Gift Carlsbad Shop Local Program
Recommended Action
1.Adopt a resolution that includes the following actions:
a.Finds that sponsoring the Gift Carlsbad shop local program to mitigate the
economic impacts of COVID-19 on small businesses serves a public purpose and
provides a public benefit
b.Authorizes the deputy city manager, administrative services to appropriate and
disperse up to $50,000, matching other donations provided to the Gift Carlsbad
shop local program administered by the Carlsbad Chamber of Commerce, from
the balance of funds previously appropriated for the Economic Recovery and
Revitalization Initiative for contingency or future city council actions
Executive Summary
The public health orders issued in response to the COVID-19 pandemic have required the
complete closure, closure of indoor operations, or modification of business operations to
reduce the risk of disease transmission. Businesses in the food and beverage, retail, and
personal care services have been affected. Many of these are small businesses, which make up
over 95% of Carlsbad businesses.
Some businesses have taken advantage of federal assistance through programs such as the
Paycheck Protection Program and the Small Business Administration Emergency Disaster
Impact Loan program. Unfortunately, federal financial assistance is running out for many
businesses and no new federal resources have been authorized.
Many local small businesses rely on the summer tourist season for a boost in revenue that
helps them stay open through the rest of the year. Visitor-serving accommodations were closed
to all travelers except essential workers from the beginning of Governor Newsom’s stay-at-
home order until June 12, 2020.
The complete closure, closure of indoor operations, modification of business operations, and a
decrease in tourism since the beginning of the pandemic have all had a significant impact on
local businesses.
Sept. 1, 2020 Item #9 Page 1 of 7
To encourage people to patronize local small businesses, the Carlsbad Chamber of Commerce,
the Carlsbad Village Association and Visit Carlsbad have developed Gift Carlsbad, a shop local
gift card program. The program allows people to purchase gift cards online for businesses in the
city that have signed up for the program. The gift card, for use at a specific business, comes
with a bonus gift card that adds additional value for purchases at that business. The bonus card
is funded by private fundraising and, if this action is approved by the City Council, public
funding from the city.
This shop local program provides an added injection of revenue for participating businesses and
discounts to residents at a time when resources are short for many people.
The action staff is recommending would authorize $50,000 of the Economic Recovery and
Revitalization Initiative funds set aside for contingency or for future city council actions to be
used as matching funds for the program administered by the Chamber of Commerce.
Discussion
Overview
On May 5, 2020, the City Council approved $5 million in funding for the Economic Recovery and
Revitalization Initiative to support businesses affected by the COVID-19 pandemic and the
restrictions in the health orders issued to slow the spread of the disease. The City Council also
has approved the following funding priorities:
• $4,400,000 to the small business loan program
• $250,000 to a joint marketing strategy with the Chamber of Commerce and the Carlsbad
Village Association
• $225,000 to be held as a contingency or for future City Council decisions
• $50,000 for the city to secure landlord-tenant mediation and renegotiation services
• $50,000 for relief for the leaseholders of city properties
• $25,000 for business community outreach
In addition to these efforts, the Ad Hoc City Council Economic Revitalization Subcommittee, the
City Council, and city staff have taken significant steps to address the economic impacts of
COVID-19. This includes:
• Passage of a commercial eviction moratorium
• Empowering the director of emergency services (the city manager) to temporarily
suspend or modify certain land development standards to mitigate the economic impact
of COVID-19
• Creating joint communications with the Carlsbad Chamber of Commerce and the
Carlsbad Village Association and distributing them to every business license holder in
Carlsbad
• Funding the “Carlsbad is Calling” $250,000 business promotion and tourism marketing
campaign
• Funding and delivering resources and materials to Carlsbad hotels and motels,
encouraging guests to observe safety protocols while in the city
Supporting local small businesses has been a goal of the city’s economic response and recovery
efforts. Encouraging residents and visitors to patronize food and beverage, retail, and personal
services in Carlsbad through a shop local program will provide economic relief when businesses
Sept. 1, 2020 Item #9 Page 2 of 7
need it the most. The city can leverage private funding and encourage additional fundraising by
sponsoring a shop local program developed by business organizations in Carlsbad. This would
serve a public purpose and provide a public benefit by providing revenue to local businesses
and the jobs they provide.
Gift Carlsbad – Shop Local stimulus program
The Carlsbad Chamber of Commerce, Carlsbad Village Association, and Visit Carlsbad, with
input from staff, have created a shop local program that will benefit Carlsbad businesses,
especially small businesses through a value-added gift card program. The organizers have asked
the city to help fund the program.
The program is designed to generate much-needed revenue for Carlsbad businesses in the
season that follows the summer peak of tourist activity. The program will also help residents
and guests by stretching their dollar at a time when local unemployment is at 11%. Based on
staff research, similar programs are underway or have been executed by the City of Freemont,
City of Clovis, the Downtown San Diego Partnership, City of Vista, La Jolla Village Merchant’s
Association and several other cities.
People will be able to buy a gift card from an online marketplace at GiftCarlsbad.com. The
program will run for a defined timeline to encourage customers to act quickly, ensuring
revenue flows to participating businesses quickly. The program will launch in September and
may be extended through October based upon participation and funding.
The program helps Carlsbad businesses by incentivizing people to purchase gift cards that are
accompanied by a bonus gift card with their purchase. If customers buy a $25 gift card for a
participating business, they’ll receive a $5 bonus card. If customers buy a $40 gift card for a
participating business, they’ll receive a $10 bonus. Bonus funds and administration costs are
covered by fundraising from private sources and, with the council’s approval, support from the
city. The Chamber of Commerce’s non-profit foundation has committed the first $25,000 to the
program.
The program is to be administered by the Chamber of Commerce and will be supported by
collaboration with other local businesses and business organizations. Any funds raised from
private sector or philanthropic sources will be donated to a non-profit foundation run by the
chamber.
Staff from the Chamber of Commerce, Carlsbad Village Association, and Visit Carlsbad staff will
jointly market the program and get businesses to sign up. All Carlsbad businesses may
participate.
In response to the request that the city provide funding for the program, staff recommends
that $50,000 be appropriated, matching other donations provided to the Gift Carlsbad shop
local program, from the Economic Recovery and Revitalization Initiative appropriation for
contingency or future City Council actions. City funding will match $25,000 already committed
to the program by the Chamber of Commerce Foundation and will provide a dollar-for-dollar
match for any additional funds raised up to a limit of $50,000.
The program is designed to use public and private funding to leverage the buying power of
consumers. Potential customers are incentivized to participate in the gift card program because
Sept. 1, 2020 Item #9 Page 3 of 7
they receive the benefit of the bonus card. That incentive, which benefits the consumer, also
results in an economic multiplier for every dollar donated by public or private sources. If private
fundraising equals the amount of public matching dollars, then it is estimated that at least
$395,000 in revenue would be generated for participating Carlsbad businesses. The actual
economic impact of the program may be even greater. When using a gift card, customers often
spend more than the amount of the card which would result in greater revenue for
participating businesses than the conservative estimate provided here. Promoting the program
may make potential customers aware of businesses they have not frequented leading to new
patrons for participating businesses. For every dollar raised from public or private sources,
there is at least a $3 to $4 impact in revenue directly to participating businesses.
Fiscal Analysis
The city has allocated $5 million to COVID-19-related economic response, recovery and
revitalization. The $50,000 sponsorship for the Gift Carlsbad shop local program administered
by the Carlsbad Chamber of Commerce will be funded by the Economic Recovery and
Revitalization Initiative funds set aside for contingency or future City Council actions. There is a
balance of $225,000 remaining in that funding priority and if this action is approved that
balance will be $175,000.
Next Steps
City staff will also participate in actively marketing the program to local businesses and
residents. Updates regarding the progress of the program will be provided to the Ad Hoc City
Council Economic Revitalization Subcommittee and during the regular COVID-19 updates at City
Council. Upon completion of the program staff will evaluate the impact of the program and
assess additional ways to support local businesses during the economic response to COVID-19
and recovery efforts.
Environmental Evaluation (CEQA)
This action does not constitute a “project” within the meaning of the California Environmental
Quality Act under California Public Resources Code Section 21065 in that it has no potential to
cause either a direct physical change in the environment or a reasonably foreseeable indirect
physical change in the environment and therefore does not require environmental review.
Public Notification
Public notice of this item was posted in keeping with the Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1. Resolution
Sept. 1, 2020 Item #9 Page 4 of 7
RESOLUTION NO. 2020-182
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROPRIATING FUNDING TO THE CARLSBAD CHAMBER OF
COMMERCE TO SPONSOR THE GIFT CARLSBAD SHOP LOCAL PROGRAM
WHEREAS, on February 14, 2020, the San Diego County Health Officer declared a Local Health
Emergency as a result of the spread of COVID-19; and
WHEREAS, on March 4, 2020, Governor Newsom proclaimed a statewide state of emergency as
a result of the spread of COVID-19; and
WHEREAS, on March 16, 2020, the Director of Emergency Services proclaimed a local state of
emergency as a result of the COVID-19 pandemic, which the City Council subsequently ratified and
extended; and
WHEREAS, on March 19, 2020, Governor Newsom issued Executive Order N-33-20 directing
individuals living in California to comply with a State Public Health Officer order to stay at home except
as needed to facilitate authorized, necessary activities or to maintain the continuity of operations at
critical infrastructure sectors; and
WHEREAS, on May 4, 2020, Governor Newsom issued Executive Order N-60-20 allowing non-
essential businesses to reopen in four stages in compliance with criteria set by the State Public Health
Officer and based on certain public health criteria being met on a county-by-county basis; and
WHEREAS, on June 19, 2020, dine-in restaurants, alcohol-serving businesses offering dine-in
meals, personal care services businesses and other businesses in the County of San Diego were
permitted to reopen subject to compliance with state issued guidance; and
WHEREAS, on July 13, 2020, a statewide public health officer order was issued closing bars,
pubs, brewpubs, and closing indoor operations of dine-in restaurants, wineries, tasting rooms, family
entertainment centers, movie theaters, zoos, museums, personal care services, and cardrooms; and
WHEREAS, the State of California has issued industry guidance to businesses that are allowed
to reopen requiring modification to business operations, which has a direct cost and may have an
impact on the space in which businesses may operate thus impacting revenue; and
WHEREAS, the impact of COVID-19 on businesses and the workforce is significant with the State
of California unemployment rate in July standing at 13.3%, which is higher than the 12.3% it was during
the height of the Great Recession (March, October, and November 2010); and
Sept. 1, 2020 Item #9 Page 5 of 7
WHEREAS, the City of Carlsbad unemployment rate in July was 11.6% compared to a 2019
average of 2.9%; and
WHEREAS, the City of Carlsbad conducted a survey of businesses impacted by COVID-19 which
ended in July and found that 72% of companies indicated the need for further financial assistance to
maintain operations over the next six months; and
WHEREAS, 78% of businesses surveyed indicated that they experienced a revenue decrease of
more than 25% due to COVID-19; and
WHEREAS, it is in the public interest to take steps to ensure local businesses remain
economically viable during the COVID-19 pandemic state of emergency; and
WHEREAS, there is a public benefit to providing economic relief to businesses impacted by the
COVID-19 health emergency, so they may continue providing jobs and tax revenue to the City of
Carlsbad to fund public services; and
WHEREAS, there is a public benefit from the city sponsorship of the Gift Carlsbad shop local
program which can provide $395,000 in revenue to Carlsbad businesses if fully funded; and
WHEREAS, there is a public benefit in promoting Carlsbad businesses through the Gift Carlsbad
shop local program which may increase the total economic impact of the program and support small
business entities in the city; and
WHEREAS, adopting this resolution is necessary and appropriate to mitigate the immediate
threats to the public health, safety, and welfare of residents and local businesses from the significant
economic impacts of the COVID-19 pandemic by providing economic relief and providing resources to
remain open in compliance with the public health orders.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That sponsoring the Gift Carlsbad shop local program to mitigate the impacts of
COVID-19 serves a public purpose and provides a public benefit.
3. That the deputy city manager, administrative services is authorized to appropriate and
disburse up to $50,000, matching other donations provided to the Gift Carlsbad shop
local program administered by the Carlsbad Chamber of Commerce, from the balance
Sept. 1, 2020 Item #9 Page 6 of 7
of funds previously appropriated for the Economic Recovery and Revitalization
Initiative for contingency or future city council actions.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 1st day of September, 2020, by the following vote, to wit:
AYES: Hall, Blackburn, Bhat-Patel, Schumacher.
NAYS: None.
ABSENT: None.
MATT HALL, Mayor
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BARBARA ENGLESON, City Clerk
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Sept. 1, 2020 Item #9 Page 7 of 7
All Receive -Agenda Item# ti/
For the Information ofth;;--
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Sept. 1, 2020
Council Memorandum
To:
From:
Honorable Mayor Hall and Members of the City Council
David Graham, Chief Innovation Officer
Via:
{city of
Carlsbad
Re:
Geoff Patnoe, Assistant City Manage;w
Additional Materials Related to Sta~ ort Item No. 9 -Sponsorship of the Gift
Carlsbad Shop Local Program
This memorandum provides additional information regarding the Gift Carlsbad shop local
program (program) and the digital platform that has been selected by the administrators as the
marketplace for the program.
The City Council will be considering the sponsorship of the program developed in conjunction
with the Carlsbad Chamber of Commerce (Chamber), Carlsbad Village Association (CVA), and Visit
Carlsbad. The program is administered by the Chamber in collaboration with CVA and Visit
Carlsbad. Additional information regarding the program is provided below.
If the item is approved, the Chamber will invoice the city for funds raised and spent to conduct
the program. City staff will review the invoice and any associated information regarding funds
raised and spent for the program and then pay that invoice or subsequent invoices up to a total
of the $50,000. Updates regarding the program will be provided to the City Counc;il during the
regular COVID-19 Actions and Expenditures report.
The Chamber has contracted with Yiftee, a provider of e-gift cards and digital promotion for
businesses. Yiftee will operate a white labeled digital marketplace where customers can purchase
gift cards to businesses participating in the program. Upon purchase of a gift card to a specific
business on the marketplace, a bonus gift card is also issued. Both cards can only be used at the
business for which it was purchased.
Yiftee was selected after other digital platforms were evaluated by the Chamber, CVA, and Visit
Carlsbad. Yiftee operates gift card programs that are used by communities and businesses across
the country. Chambers, cities, downtown associations, main streets, and private bus'inesses use
these cards for regular purchases, and employee and customer rewards. The gift card
marketplace that Yiftee provides allows any Carlsbad business to participate quickly and easily. A
business can sign up, and when a gift card customer purchases a card, the revenue goes directly
to the business. This is an added benefit for the business because they don't have to wait until a
gift card customer uses the card to accrue the revenue. Gift card programs that are usable at
Administrative Services Branch
Office of Innovation & Economic Development
1635 Faraday Avenue 1. Carlsbad, CA 92008 I 760-434-5992
Council Memo -Item No. 9, Sponsorship of the Gift Carlsbad Shop Local Program
Sept. 1, 2020
Page 2
multiple business have a delay between the purchase of the card and the revenue associated
with a transaction at a business. By having a gift card program that allows for the purchase of a
card for a specific business, the revenue from the card, less any administrative costs, goes
directly to the business prior to the transaction utilizing the card.
The platform has been used in other cities, including the Del Mar Village Association, Downtown
Nashville Partnership, Little Italy Food Hall, International Baricard in Detroit, Royal Oak
Downtown Development Authority, Downtown Cincinnati Inc., Fayetteville Area Convention and
Visitors Bureau, City of Frisco, City of Mason, and the City of Fremont. The City of Vista is also
considering Yiftee as the marketplace vendor for their community gift card program which is in
development. A white paper entitled "Saving Main Street: How Public-Private Partnerships
Stimulate Small Busines? COV/D-19 Recovery Efforts" was published by Yiftee in August 2020. The
white paper outlines some of the programs they are running in cities around the United States
and is attached to this memorandum.
Yiftee was originally introduced to Carlsbad through Main Street America, an organization of
main street groups across the country with over 2,000 affiliates. The CVA made the city and other
business organization partners aware of Yiftee during discussions on additional ways to
encourage local shopping. One of the most recent programs that had been launched was in the
City of Fremont. The CVA, which is a member of Main Street America, contacted the staff at the
City of Fremont, who were familiar with the program. Fremont staff provided detailed
information and a positive review of their experience with Yiftee.
Yiftee is rated "A+" by the Better Business Bureau (BBB). City staff conducted a review of the BBB
website which includes reviews by users. The site included positive and negative reviews. When
reviewing the poor ratings, it appeared that the majority were related to user error or security
requirements, where the platform did not allow a purchase because the customer failed to verify
their identity. In most cases, a Yiftee representative responded to try to assist with a solution.
Other platforms that may be able to provide a similar service for a gift card program like Yiftee
include Gift Fly and Gift Up. When comparing the pricing of the platforms, Yiftee was generally
similar or less expensive than the competitors evaluated.
Yiftee has reduced their fees in response to the COVID-19 pandemic to support small businesses.
Yiftee charges a 5% fee, which includes all credit card processing fees. Processing fees are
charged to a business by the company processing a credit card transaction. Gift Fly charges a 4%
fee, plus 2.7% to the vendor for processing a transaction. Gift Up charges 3.5% plus standard
credit processing fees, which can typically run between 1.5% and 3%. Yiftee's fee is competitive
and comprehensive, which is an advantage when evaluating the cost of program administration.
The administration and processing fee will be funded by the program and not passed on to the
participating businesses.
Council Memo -Item No. 9, Sponsorship of the Gift Carlsbad Shop Local Program
Sept. 1, 2020
Page 3
In reviewing all of the information regarding the creation of the program, and subsequent
discussions with the collaborators involved, city staff recommends approval of the program.
Attachment: A. Saving Main Street: How Public-Private Partnerships Stimulate Small Business
COVID-19 Recovery Efforts, August 2020
cc: Scott Chadwick, City Manager
Celia Brewer, City Attorney
Laura Rocha, Deputy City Manager, Administrative Services
Matt Sanford, Economic Development Manager
Attachment A
•
Keep Local Dollars Local
Saving Main · Street:
. How Public-Private Partnerships Stimulate
Small Business COVID-19 Recovery Efforts
-August 2020
1
Table of Contents
Introduction: Why Shop Local & Shop Local Programs 2
Buy One Get One Programs 5
Employee and Constituent Gifting Programs 8
Other Creative Gifting Programs 11
Conclusion 13
Getting Started 15
About Yiftee 1 6
References 17
2
Introduction
The coronavirus crisis has upended life as we know it, and small businesses
are feeling the pain more than most. The virus is a danger not only to our
neighbors but to our neighborhood businesses that make our communities
unique. Already struggling in recent years due to the transition to big box stores
and e-commerce, a recent McKinsey study found that "many small businesses
across sectors came into the COVID-19 crisis with low financial resilience. Close to
a third were operating at a loss or breaking even prior to the crisis."1 Small
businesses do not have the support structure of large corporations and
franchises whose business models are more elastic. As a result, "analysts warn
this is only the beginning of the worst wave of small-business bankruptcies and
closures since the Great Depression."2 According to the Independent Restaurant
coalition, "As many as 85% of independent restaurants may permanently close
because of the pandemic by the end of 2020."3
Unprecedented times call for unprecedented action. Concerned cities,
towns and neighborhoods across the United States are responding like never
before with programs to generate business for their local shops and restaurants.
This paper will discuss many examples and case studies from cities as large as
Detroit, Ml and Nashville, TN and as small at Madison, IN and Geneseo, IL. We will
show that when communities come together in a united "shop local" movement,
the power of the whole is greater than the sum of its parts. Furthermore,
public-private partnerships with large employers such as corporations, tech
companies, city offices, realtors, citizen groups and more have amplified the
effect of "shop local" programs, resulting in significant economic aid for local
small businesses.
While the COVID-19 crisis is an urgent catalyst for immediate change, these
shop local solutions strengthen communities and their members' quality of life in
the long term. It is time to support the local businesses that have been
supporting our communities for as long as we remember. This paper hopes to
inspire more employers, professionals and consumers to cooperate with local
Chambers of Commerce, Offices of Economic Development and Merchant
Associations to implement their own local versions of what follows.
Why Local Businesses Are Important
3
Besides bringing character and charm to neighborhoods across the
country, local businesses are a vital part of the national economy. Small
businesses across the country "employ 58.9 million people in the United States, or
about 47.5% of the total private-sector workforce. Their GDP contribution
measured $5.9 trillion in 2014, the most recent year for which small business GDP
data is available."4 Small businesses will need our support for the rest of the
pandemic and long after, and corporations are in a prime position position to
play a significant role in the preservation of our downtowns. "Permanent closures
of small businesses are thought to generate longer-lasting unemployment than
temporary furloughs and layoffs do."5 Small businesses are not just responsible
for your bacon, egg and cheese sandwich on the way to work-their fate plays an
important role in the national economy.
Shop Local Programs
Chambers of Commerce and Merchant Associations are organizing local
programs to help save their small businesses and persist through the COVID-19
pandemic. There are many different approaches, from government loans, to rent
relief and salary grants. We will discuss options that are not based on grants or
loans-but programs based on conscious choices to keep local dollars local and
create real revenue for the small businesses. They reflect the experience in
multiple communities implementirigtwo different gift card programs: a
Community Card and a Gift Card Marketplace. These local gift card programs
sustainably enable buyers to funnel dollars to their local businesses, instead of
leaving the community via e-commerce and national brand gift cards.
A Community Card is a multi-brand gift card that can be used at many
participating businesses in a cohesive geography-a city, town, neighborhood or
business improvement district, to name some examples. Branded for the
community, these cards have many uses from personal to corporate, in addition
to making the giver feel good for their connection to and support of the
community. With potentially hundreds of choices for how to spend the card,
multi-brand Community Cards are more versatile and valuable to buyers than
any single-brand card.
A Gift Card Marketplace is a collection of digital gift cards for individual
businesses in a certain area. A Marketplace becomes the one-stop-shop to a
variety of small business eGift cards in the local area -an on line version of a
community's Main Street. Working together, local businesses can combine
marketing forces to reach consumers and corporate customers more effectively
than any one small business can on its own.
4
Big box and e-commerce gift cards are so successful because there is
something for everyone. Community Cards and Marketplaces have the same
versatility, but with an emphasis on local small businesses. Similar to preloaded
cash gift cards, one can spend a Community Card at the local coffee shop, retail
store and salon in a single day while ensuring all the dollars are being spent
locally in a c:ommunity the card-holder cares about.
Though we have seen communities embrace the eGift card programs, the
most successful programs are those that are being sponsored by partners who
want to support the community. Sponsors and partners can be local employers
such as corporations, city governments, hospitals and other essential businesses;
professionals such as realtors, doctors and attorneys; service providers such as
banks; insurance companies and marketing agencies; visitor bureaus, and
concerned citizen groups such as school parents, athletic teams and club
members. The following sections will discuss several different partnership
programs and the impact they are having on their local areas.
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Buy 9ne Get One Programs
One very successful program that has been used among many
communities is a Buy One Get One (BOGO) program. The BOGO program
rewards card buyers with additional funds for every certain amount purchased -
e.g. buy $30, get an extra $70. The funds for these promotions have come from a
variety of sources such as corporations, city and local government budgets and
even individual donors. One of the major benefits of a buy one get one promotion
is the high return-on-investment. For example, a buy $30 get $70 promotion with
a $7,000 budget creates an additional $3,000 or a 300% return on the initial
investment and $4,000* going to the local businesses.
Coupled with this high return, BOGO programs drive card sales up. In
Figure 1, we compare the cumulative number of cards sold from a community
with a BOGO program to the Yiftee Average. This metric shows the averages of a
Ylftee Community card based on multiple Yiftee clients.
Comparison of BOGO Program to Yiftee Average
Type
• Fremont
• Yiftee Average
& & & & & & & & ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ $" ~OJ -o/ '-1..(b ~ ~ $ -? 'S ~
Figure 1: Comparison of a community with a BOGO vs the average across all Yiftee communities
shows fast adoption and higher card sales as a result of the promotion, quickly making
thousands of dollars available to local businesses.
6
The BOGO program started in the beginning of May and si nce then, the
community is consistently above its peers for total cards sales. Not only do
corporate gifting programs yield high theoretical returns on investment, but they
have demonstrated a clear incentive for community members to purchase cards.
It is important to note that the bonus dollars gifted can have an expiration
date. This allows the sponsor to promote a fast card turnover rate, injecting
money into the local economy. In the end, these BOGO programs have been
extremely successful for helping the local small businesses and have shown how
large donors can enhance their local recovery efforts through eGift Card
promotions. Examples include:
~~
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DOWNTOWN DOLLA~S
Frisco, CO -Love Frisco, Shop Frisco eGift Card: The Frisco Town
Council invested $725,000 through the redirection of tax dollars in their
Love Frisco, Shop Frisco eGift Card program to encourage the
community to shop and stay locally. With this community gifting
program and encouraging promotion, Frisco local businesses will see
$340,000 thanks to the initial investment that will benefit the
community not only today, but long in the future.
Fremont, CA-GiftFremont eGift Card Marketplace: The city of
Fremont, California launched their eGift Card Marketplace with a
$5,000 budget to run BOGd promotions. After the early success of the
card Seagate, a local tech company, cjecided to add another $5,000 to
that promotion budget, shortly followed by an additional commitment
from a global media company. As of the end of July, Fremont has sold
over $75,000 worth of cards
Nashville, TN -Downtown Dollars eGift Card: Over 30 local
corporations have contributed varying amounts to Downtown
Nashville's BOGO promotion for the Downtown Dollars eGift card. The
Card can be used at over 50 locations (and counting) in the Downtown
Nashville community. The combined donations, and resulting
consumer purchases will contribute more than $400,000 to local
business revenue in the coming months.
Geneseo
DoubleBucks
Fayetteville, NC-Downtown Fayetteville eGift Card: In early May,
2020, Fayetteville, NC launched a Yiftee Community Card with a
successful buy $50 get $25 promotion that has helped change
community member behavior and bring in thousands of dollars of
revenue for the local businesses.
7
Geneseo, IL -Geneseo Double-Bucks eGift Card: In May 2020, a
community-minded group from Hanford Insurance set out to help
their local businesses weather the COVID-79 storm. They
conceptualized the Double Bucks program, and raised $40,000 from
local corporate sponsors at Gold (>$5k), Silver ($2k-$5k) or Bronze
(<$2k) levels. In parallel, the Geneseo Chamber implemented a
Community Card and together they launched the program. They sold
out in less than three weeks, pumping $80,000 into the local
businesses in their time of need. Now the program is being replicated
in other nearby towns.
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8
Employee and Constituent Gifting Programs
Another way to support the community as an employer is to purchase local
gift cards for your employees, rather than buying national brand or e-commerce
cards. We have seen employers do this in a variety of ways including,
implementing small business and community gift cards for holiday gifts,
anniversary gifts, as well as ongoing employee rewards and spot bonuses.
Shifting the way companies reward their employees will not only help the
community in the long term but also give employees a gift that is versatile and
allows them to customize their experience. Figure 2 shows the potential impact
of employee gifting programs.
Comparison of Employee Gifting Program to Yiftee Average
• • • • • I ■ ~ a I S • •
& & & & & & & & RR RR RR RR
,:;:--,Q ~ A-~ ,:;:--::;, ~ -:,'lr l.t..(b ;ff z-$ -'? ~ ~
Figure 2: Comparison of a community with an employee gifting program vs the Yiftee Average
shows the impact local employers have when they use local gifting
options for employee gifting programs
Type
• Detroit
• Yiftee Average
The large difference between the Detroit Card's sales and the Yiftee
Average is because of the robust employee reward programs by Quicken Loans
and Bedrock Development. Since the creation of the Detroit Card in 2077, the
companies have helped bring in over $2 million for small businesses in Detroit.
Furthermore, depending on the program structure, companies incur little
9
additional costs by switching to a locally focused employee reward program. It is
simply a switch that allows the company to spend the same amount of money
on employee rewards but ensure the money will be spent at local businesses
instead of national brands and e:-commerce providers. Examples include:
COME TOGETHER
MASON
Detroit, Ml -Detroit Card, an eGift Card: Quicken Loans and Bedrock
Development made the switch in their own employee rewards program to
give their employees the local Detroit Card. By replacing traditional
national brand gift cards with the local option, Quicken Loans and Bedrock
are able to put over $2 million back into 100+ of the local businesses in
Downtown Detroit.
Royal Oak, Ml -Downtown Dollars eGift Card: A suburb of Detroit, Royal
Oak launched Downtown Dollars in an effort to assist their small
businesses' recovery from COVI D-19. The Downtown Development
Association gifted $500,000 in the form of25,000 $20 Downtown Dollars
cards directly to those who signed up for their newsletter. Royal Oak saw
fast success with $20k redeemed in the first week. This gifting program
provided incentives for the residents to interact with merchants they
might not have previously. Creating new customers for Royal Oak smal.I
businesses and financially boosting them are both outcomes of this
program.
Mason, OH -Come Together Mason eGift card: The City of Mason rolled
out two unique programs during the onset of the COVID-19 shutdown.
Initially, the City of Mason rewarded some of their most loyal members of
their Community Center with a $20 Come Together Mason eGift Card to
thank them for their commitment to the City and also provide a creative
way to support small businesses during the unprecedented times. This
resulted in approximately $40,000 being injected into the local small
business economy ber-iefiting over 70 small businesses in Mason. However,
the City of Mason did not stop there. In June, Mason City Council
authorized funds to waive one month of every resident's sewer fee and
also provided a $50 Come Together Mason eGift card to every resident
that provided their email to the City. The program is still ongoing but
current numbers indicate a total of over $700,000 and counting has been
spent in the local business economy since the card's inception in late
March 2020.
10
Lancaster, SC-$Loca/Lancaster$ eGift Card: The City of Lancaster kicked
off their community eGift card program with generous gifts of $300 for
each city employee to spend at local businesses. This totaled over $50,000
at launch. In the first week, $73,000 of those cards were redeemed, going
straight into the pockets of Lancaster's small businesses. Now, the city is
recruiting other large employers to give in similar ways.
600
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11
Other Creative Gifting Programs
Communities are using many creative promotional campaigns to drive card
sales. They are using Community eGift Cards as prizes for raffles, local competitions
and more! Figure 3 shows the cumulative card sales for a chamber that is
deploying several creative gifting programs, compared to the Yiftee Average.
Comparison of Creative Gifting Program to Yiftee Average
Type
• Madison
• Yiftee Average
& & & & & & & & ~RR RR~ R ~ (;:-~ ~ 4-;;:\. (;:-s .::,O:i -:,lb' l.i..<b ~ ~ .$ ~ '5 ~
Figure 3: Comparison of a community with an creative gifting program vs the Yiftee Average
highlights the versatility and success public-private partnerships have on community gift card sales
Since the start of their creative gifting strategy, the total amount of money
spent on Madison's Community Card has increased ten_times from less than $2,000
in April to over $20,000 by July and has consistently outperformed the Yiftee
Average.
12
Local gift card programs are a versatile tool that can be shaped to the needs
of individual communities and sponsors. Sponsors are able to utilize the flexibility of
gift cards and create a program that helps both small businesses and the sponsors.
There are many creative ways to use these programs, some examples include:
~~
GI F'1'1
FREMONT
Madison, IN -CHAMBER CA$H eGift Card: The Madison
Indiana Chamber of Commerce has been running daily eGift
card raffles to reward community members who shop local. In
order to enter into the raffle one must spend money locally
and send the receipt to the chamber for entry. Winners are
picked daily and the program has created a new customer
base for these small businesses w ith both gift cards and upsell
spending.
Fremont, CA -CiftFremont eG ift Ca rd Marketplace: The
Fremont Fourth of July committee recently put together a
porch parade in lieu of a traditional Fourth of July parade due
to COVID-79 restrictions. Residents enter a contest for the best
decorated porch with the w inners receiving local eGift Cards.
This event inspired local pride and supported small
businesses.
Miamisburg, OH -Explore Miamisburg eGift Card: In order to
keep the Community engaged at a distance, Explore
Miamisburg has been running scavenger hunts throughout
the summer, using Community Cards as rewards.
Birmingham, Ml -Birmingham Bucks eGift Card: The
Birmingham Shopping District launched a creative program
called "Quarantine Cash" and awarded Birmingham Bucks
cards to people who could provide receipts from local stores.
The program generated more than $25,000 in local rewards,
and many times that in sa les at the local shops.
13
Conclusion
The COVID-79 pandemic will impact small businesses for years to come. The
shop local movement is imperative to avoid small business closings and desolate
downtowns. Employers, corporations and individuals have an essential role to play
in the preservation of these important businesses by voting with their doll ars and
supporting local gift card programs. The United States eGift Card market is
expected to reach $707,979 million by 2024 with a compound annual growth rate of
78.7% from 2020-2024.6 Furthermore, according to the Incentive Research
Foundation, 69% of businesses with an annual revenue between $700 million and $7
I
billion purchase gift cards for rewards. 67% of firms with an annual revenue greater
than $7 billion purchase cards for the same reasons.7 It is no surprise that the
majority of these cards are for large e-commerce sites or national brands.
Redirecting these gift cards towards local Community Cards and Marketplaces will
help chambers of commerce, city offices and corporations affect positive change
for the community's valuable small businesses. Studies have shown, "On average,
48 percent of each purchase at local independent businesses was recirculated
locally, compared to less than 74 percent of purchases at chain stores."8 This effect
of shopping local goes beyond a single t ransaction and helps drive positive
economic growth. Chambers of commerce, city and corporations are uniquely
positioned to be the primary driver of this change-leveraging their financial capital
to help small businesses.
Due to the uniqueness and flexibility of local community gift card programs,
sponsors can tailor their program to fit the needs of their business and their
community. Large, one time gift donations, as seen in Mason Ohio, can both serve
as a form of employee/ customer gratification, and can rapidly put thousands of
dollars into the hands of the local small businesses. Alternatively, by sponsoring a
bonus program, such as a Buy One Get One, the sponsor enhances already existing
shop local initiatives with a compelling incentive that will reward all community
members along with the small businesses.
In order to save small businesses, employers and corporations need to
partner with local Chambers of Commerce and Merchants Associations to
encourage shopping locally. This will make a material impact on the survival of
small businesses through COVID-19, as well as their future prosperity.
14
Getting Started
As a Community Organizer:
• Find out if your community has any community gift card programs that are
already set up but underutilized
• Reach out to local small businesses to better understand their individual
needs and concerns at the moment
• · Work to not only simply encourage people to shop local, but create active
and fun incentives that will benefit everyone
As a Sponsor (Employers, Professionals, Hospitals, Concerned Citizen Groups,
etc.):
• Reach out to your local business organizations like Chambers of Commerce
and Downtown Associations to see how you can contribute to any existing
shop local campaigns
• Encourage your employers to support local-offer perks for doing so
15
• Suggest implementing a local Community Card or Ma rketplace program as a
way to g ive back to your community. It is much easier to set up a card when
there are sponsors lined up to buy them. The programs are paid for by smal l
eDelivery fees on g ift senders, which means they are free to chambers and
loca l merchants.
As an Individual:
• You vote w ith your dollar, and every dollar counts!
• Go out to local restaurants rather than chains and franchises
• Encou rage your social circle to look local first
• Support your favorite small b usinesses with you r voice. Leave positive reviews
and recommend them to friends
16
. About Viftee
Yiftee (Yiftee.com) is the award winning, no hassle eGift card and promotions
solution for local businesses and communities. With no special technology or point
of sale (PoS) integration, no revenue-share and no special accounting, it's easy for
local organizers and individual merchants to offer eGift Cards on their websites,
Facebook pages, lnstagram and other social media. Local merchants gain
additional sales, foot traffic, and an eGifting capability like big retailers. Community
Cards and Marketplaces group together local merchants to create eGift card
solutions that offer something for everyone, custom branded for the city or town.
Consumers, corporations, and merchants use the Yiftee mobile and online website
to send thoughtful gifts via email, text or print. Recipients receive their Yiftee gifts
using their smartphone at their favorite local restaurants and shops, driving
profitable business to those merchants. For more info seeyiftee.com or email
sales@yiftee.com.
17
References
l. https://www.mckinsey.com/industries/public-sector/our-insights/us-small-bu
si ness-recovery-after-the-covid-19-crisis
2. https://www.washingtonpost.com/business/2020/0S/]2/small-business-used-
define-americas-economy-pandemic-could-end-that-forever/
3. https://www.businessinsider.com/85-of-independent-restaurants-could-perm
anently-close-in-2020-report-2020-6
4. https://hbr.org/2020/03/what-small-businesses-need-to-survive-the-coronavir
us~crisis
5. https://www.mckinsey.com/featured-insights/americas/which-small-business
es-a re-most-vu In era ble-to-covid-79-a nd-when
6. https://www.businesswire.com/news/home/2020072900538l/en/U.S.-Digital-G
ift-Ca rd-Incentive-Ca rd-Market
7. https://theirf.org/research/a-closer-look-at-gift-cards-us-spend-support-sourci
ng-and-services-for-gift-card-programs-in-corporate-organizations/2409/
8. https://www.amiba.net/resources/multiplier-effect/
Mia De Marzo
From:
Sent:
To:
Cc:
Subject:
Dear Mayor and City Council:
Christine Davis <chris@carlsbad-village.com>
Tuesday, September 1, 2020 1 :23 PM
City Clerk
David Graham; Matt Sanford
All Receive -Acen■il Item# Y
For the lnform;itien ef the:
CITY COUNCIL
DateCfflj~CA _.:e._cc _e 1,
CM .::f2_ACM ~DCM(3)~,,,
Agenda Item #9 -Sponsorship of the Gift Carlsbad Shop Local Program
I am writing today to let you know how excited I am about Gift Carlsbad, a shop-local bonus gift card program ideally suited to
put money into the pockets of our small businesses right away, at a time when they need it the most. Similar programs are in
operation throughout California and are being used by other Main Street affiliates to help in the recovery efforts of their
downtowns.
Gift Carlsbad will not only financially benefit the small businesses in Carlsbad Village, and throughout the entire city, but it will
also help brand Carlsbad as being "Open For Business." And, open in the safest way possible. In a pre-Covid world, by this time
of the year, the Carlsbad village Association has already hosted a variety of events such as the Spring Shop Hop in April, Mothers
and Father's Day events, Art in the Village, which would have celebrated it's 22nd consecutive year, half a dozen Shop With The
Chef Farmers' Market dinners, six Flicks at the Fountain "movies under the stars," and would be preparing for its annual Taste of
Carlsbad Village to celebrate the downtown restaurants. With the absence of these types of events, that are designed to
increase foot traffic to the Village, and bring attention to Carlsbad in general, we need a program like Gift Carlsbad to refocus
attention on our business community.
The Gift Carlsbad program is a win-win for all involved, and thanks to a generous grant by the Ready Carlsbad Business Alliance
non profit, the Chamber of Commerce, the Carlsbad Village Association, and Visit Carlsbad, are now ready to get this rolled out
to the community. A matching grant from the City of Carlsbad to be put towards the bonus gift card portion of the program
would make this program even more beneficial.
Thank you to the Ad Hoc committee for their role in bringing Gift Carlsbad to light, and to the council for your consideration
today in adopting the resolution to sponsor Gift Carlsbad.
Sincerely,
CHRISTINE DAVIS I Executive Director
Carlsbad Village Association
p: 760.644.2121
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