One City’s Plan to Help Local Businesses by Funding a Cash Rewards Program

The skyline in Akron, Ohio.

The skyline in Akron, Ohio. Shutterstock

 

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As Akron, Ohio grapples with fallout from the coronavirus, the city is working to launch a mobile app where people will earn “blimp” credits for local purchases. The credits can then be used like currency at other area establishments.

The city of Akron, Ohio is hoping to help local small businesses weather the coronavirus-driven economic downturn with the launch of a new smartphone app and a program that provides consumers with city-funded cash rewards for spending money in town.

Deputy Mayor James Hardy said that prior to the virus outbreak, Akron didn’t have plans to launch a program like the one now in the works. But when the pandemic hit, he said, “that really forced my team and I to sit down and think about how we could respond, specifically to our small business community, in a way that recognized what could potentially be a new normal.”

The plan is for an app that connects consumers with two kinds of participating local businesses: ones where people can shop and earn rewards points and others where people can go and cash in the rewards that they’ve earned.

In the app, the rewards people earn will appear as blimps—a tribute to the city’s history as a major industrial hub for rubber manufacturing. Blimps serve as a local icon of sorts and tire-maker Goodyear still maintains an airship facility near the city for its blimp fleet.

Customers who spend at eligible local businesses featured on the app will earn cash back in blimp credits on their purchases. Each blimp will be worth $1. Customers who earn rewards can then spend their blimps at businesses that are accepting them.

As it stands, the plan is to load the app with about 120 locally-owned small businesses in downtown Akron and other neighborhoods where people can earn blimps, Hardy said. The city’s goal, he explained, is to get about 30 businesses lined up where people can spend the blimps. It had about 20 as of late last week. 

Akron’s city government is covering the cost of the rewards. So, in other words, if a business that accepts blimps gets 24 of them from customers in a month, they’d get $24 from the city.

The city now has a $40,000 budget set aside to reimburse businesses for blimps that they accept as currency. Akron officials are also looking at whether they might be able to use funds available under the federal relief package known as the CARES Act for the program.

To develop the app, the city is working with Colu, a civic-oriented tech company. Hardy said the city has an 18-month contract through 2021 with the company and that Akron will pay Colu about $31,250 for this year and $100,000 next year.

With the initial version of the app, customers probably will not be able to make online purchases at the local stores through it, Hardy said. But he also said the city is working with Colu to figure out ways to incentivize online purchases with future versions.

“It’s something we’re already planning for,” he said. “Obviously we have to be cognizant of the fact that as we move through this pandemic, we may have other shutdowns.”

Hardy acknowledged that people might be timid to head out to businesses like restaurants, or barbershops as the virus persists, but said the idea with the app is to provide a perk for people who do venture out “safely, wearing a mask” to spend at local establishments.

Reopening the economy as the virus continues to infect thousands of Americans has been a balancing act for government officials and business owners. The strict business closures and stay-at-home mandates authorities began to impose earlier this year to slow the spread of the virus left many small businesses struggling for survival.

Some states that moved more aggressively to reopen their economies after these initial shutdowns, like Texas and Florida, are now dealing with significant virus flare-ups.

In Ohio, there have been 57,956 confirmed coronavirus cases and at least 2,927 deaths, according to state figures updated Monday. A New York Times database shows that the seven day average for cases in the state has been generally rising since mid-June.

Summit County, where Akron is located, has had at least 2,100 cases and 206 deaths, the state data show.

Nationwide, there have been about 2.9 million confirmed cases and upwards of 130,000 confirmed deaths.

Hardy said that in normal times Akron’s downtown businesses depend heavily on patrons who work in the area.

“What we’re seeing is a lot of our small businesses have lost a lot of their customer base,” he said. He noted that even though Ohio has been reopening its economy, many large employers still aren’t calling all of their workers back to downtown offices yet. 

The city’s current plan is to launch the app and rewards program by late July or early August. “We view the app as a tool. It’s not a silver bullet, it’s not a panacea,” the deputy mayor added. “We’re hoping it’s an important tool to try and help.”

Bill Lucia is a senior reporter for Route Fifty and is based in Olympia, Washington.

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