American Express expands small business perks as it reportedly falls under federal investigation

Courtesy of American Express

Dive Brief:

  • Days before The Wall Street Journal reported federal investigators were looking into American Express’ sales to business owners, the company introduced more incentives for small businesses, including 30% off social media management tools from Sprout Social and four months of free access to BigCommerce for building an online store, the financial services company said Tuesday.
  • In addition to offering resources for growing merchants’ online presence, the company is also giving sellers up to 400,000 rewards points for business-related expenses such as office supplies, shipping and advertising. Business customers can now earn up to $250 cash back on select business purchases, too, per the company’s Tuesday announcement. 
  • The rollout of these perks comes as the company is under federal investigation for its business card sales practices, The Wall Street Journal reports, citing sources familiar with the matter. On Thursday, the publication reported that the Treasury Department, the Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency are investigating sales practices at American Express, including whether the company harmed business owners through aggressive sales practices.

Dive Insight:

Though American Express is reportedly under investigation for its treatment of business customers, the card issuer has long positioned itself as an advocate for small merchants. Nov. 28, 2020, was the company’s 11th year of promoting Small Business Saturday, according to a release. The card issuer projected that consumers spent about $19.8 billion with independent retailers that day, a slight increase from $19.6 billion in 2019. 

The expansion of rewards announced earlier this week is another way the company is again trying to assert itself as a supporter of small business. American Express sought to tailor these new rewards for purchases such as shipping and advertising to suit the current needs of small businesses while positioning them to succeed in the future, Courtney Kelso, senior vice president and general manager of U.S. Commercial Card and Global Commercial Services at American Express, said in a statement.

“As the business landscape evolves, we’re focused on designing offers and solutions that give small businesses the continued support they need to navigate these uncertain times and come out stronger,” Kelso said.

American Express is courting independent merchants as the COVID-19 pandemic has forced small businesses to adapt to uncertain and evolving economic conditions. In September 2020, the National Retail Federation’s Chief Economist Jack Kleinhenz called the coronavirus pandemic “a shock to America’s small employers.” While hardships brought on by the coronavirus pandemic have been especially hard on small businesses, some have pivoted to serve their customers in different ways and remain afloat.