Retailers launch Oakland Gift Card to help people shop locally

A small group of local businesses kicked off the holiday shopping season this month by introducing a new gift card program intended to keep retail sales dollars in Oakland. The “Oakland Gift Card,” which is available in amounts between $20 and $200, is accepted by 20 Oakland businesses, ranging from electronics and apparel stores to restaurants and art galleries.

“It’s easy to buy an iTunes gift card,” said Luan Strauss, the owner of Laurel Book Store on MacArthur and 29^th Avenue, and one of the first business owners to join the pilot gift card program. “But this is a great way to call attention to local businesses. It’s the perfect Oakland-centered way to keep dollars in the city.”

The card works like most other prepaid gift cards, using a simple debit function, and can be purchased and reloaded online, or at participating stores. But unlike more familiar gift cards, which bear a Visa, Discover, or other major credit card logo on their bottom right corner, this card is all local—backed by One Pacific Bank, which is headquartered in Oakland—and managed by Hope Solutions, a low-cost payment processing and e-commerce firm also based locally.

The participating businesses reflect a range of price points:

A $25 Oakland Grown gift card, for example, could get you a journal at Laurel Book Store as well as a sampler plate of shrimp rolls, chili calamari and papaya salad at Vo’s Restaurant on Grand Avenue and Webster Street.

A $200 gift card, conversely, could cover the purchase a 10×10 local artist print from Slate Contemporary Gallery on 25^th Street and Broadway Road, plus a Bodum tea press from Entrez! Open House home furnishings on 17^th Street and Telegraph Avenue, with change to spare.

And somewhere in between these two price points, is a graphic hoodie from fiftyseven-thirtythree’s online store, a cut and style from Azure Salon on Piedmont Avenue, or a massage from East Bay Five Element Acupuncture on Grand Avenue and Elmwood Avenue.

Oakland Grown—a network of independent, locally owned businesses, and a project of the Sustainable Business Alliance—launched the gift card pilot program this month in an effort to promote small businesses that are often neglected by shoppers during the holidays, while keeping sales dollars circulating within Oakland’s economy.

The latter is a high priority for city officials, who have expressed frustration over the amount of sales tax lost by the city when residents do their shopping elsewhere. “We have a serious sales tax leakage issue,” said Aliza Gallo, an economic analyst with the city’s Community and Economic Development Agency, noting that $1 billion in retail activity leaves Oakland every year because residents choose to shop in surrounding cities.

“If everything had been bought in Oakland,” Strauss said of the $1 billion leakage, “there would be revenue to pay employees, who then buy groceries and pay rent. When we buy online or outside the city, that’s not helping the city.”

The Oakland Gift Card is a small-scale effort to pull some of that lost sales tax revenue back into the city, while capitalizing on the growing demand for gift cards among shoppers. This year alone, gift card sales grew 8 percent, according to Data First, a nationwide payments processing company that tracks gift card trends. Nearly half of gift cards purchased in 2010, moreover, were “open loop” cards—cards redeemable at multiple businesses rather than just one.

The cards never expire, Oakland Grown promises, and can be continuously reloaded and used whereever they’re redeemable. For now, 20 businesses accept the card, but Oakland Grown staff is working to get more of the network’s 250 members to sign onto the program.

From a business owner’s perspective, there can be a downside to open-loop gift cards like Oakland Grown’s: Money that might otherwise be spent in a single shop is instead divided between several. But the shop owners participating in the program aren’t worried about that.  “It’s not the big-box store mentality,” said Sandy Dolan, owner of Bells and Whistles, a gift shop that sells arts and crafts by 40 different Oakland artists. “We’re all in this together. We’re not getting rich, but the whole idea is about supporting our community in the Bay Area.”

Dolan said that when she opened her store a year ago, she made a choice to almost exclusively sell local products, and to pay the artists up front for their products rather than selling them on consignment. She knew neither decision would fast-track her to high profits, but she nevertheless felt that it was the responsible thing to do—and something that the local community would value.

“People always talk about shopping local,” she said. “I’ve created this space and provided what the community’s talking about and asking for. By shopping here, you’re not just helping me to profit but you’re helping the artist to profit.”

For Strauss, the shared gift card is both a symbol of her bookstore’s interdependence on other local businesses and a tangible connection to them. “We’re not out there alone,” she said. “The same economy and issues are affecting all of us. We’re all trying to keep ourselves in business.”

To explore businesses that sell and accept the Oakland Grown gift card, see our interactive map towards the center of this page. Recently added stores not pictured above are: Bells and Whistles, Manifesto Bicycles and Ancestral Apothecary.