Small businesses get creative with card rewards

Some firms redeem cash back and points to benefit and keep employees

Tony Mecia
Personal finance writer
Rewards expert who writes the "Cashing In" reader Q&A column for CreditCards.com

Some small businesses using rewards to retain workers

It’s a good time to be a small-business owner: The economy is doing well, business optimism is near an all-time high, and many companies are expanding. 

But as good as business might be, a lot of small-business owners might not realize that business credit card rewards can play an important role in helping them overcome one of their biggest challenges – retaining employees.

With unemployment below 4 percent, near its lowest level in two decades, many businesses are having trouble hiring and hanging on to workers. A May 2018 survey by the National Federation of Independent Business found that the top problem cited by business owners was finding qualified employees. Once those employees are hired, the tight labor market can make it hard to keep them. 

That’s where credit card rewards can come in. Troy Dye, chief marketing officer for Capital One’s Spark for Business credit cards, says he is seeing more small companies use their credit card rewards to help build bonds with employees. 

Cash back pays for parties, card rewards buy scrubs

Dye cites Semihandmade, a California maker of custom doors for Ikea cabinets, which he says uses its cash back rewards to throw parties and hold events for employees – a key part of the business’s retention strategy.

Dye adds that he knows of a rheumatologist’s office in Florida who uses rewards to purchase scrubs and stethoscopes for its staff – items employees customarily would buy themselves. 

Although many business owners probably keep a company’s credit card rewards for themselves as a form of compensation, it can make sense to plow those rewards back into the business, Dye says.

The idea is that owners of small businesses can use that money to create more of a family feeling in the workplace, which can help attract and keep workers amid a national labor shortage. Owners also could put that money into workers’ paychecks, but sometimes other gestures can feel more meaningful. 

“I don’t think the way to the heart of the employee is an extra 1 percent,” Dye says. “A genuine show of appreciation can have a lot more meaning.” 

How business card rewards add up

As businesses grow and put more money on their credit cards, selecting the right business credit card becomes even more important. For a company that puts $500,000 a year on a credit card, earning 1 percent cash back generates $5,000 in rewards, while earning 1.5 percent cash back makes $7,500 – a difference of $2,500. 

For many years, American Express was considered the leader in offering credit cards to corporate customers. But in recent years, other banks have developed credit cards aimed at businesses, too. 

Today, many major reward cards have business versions. A lot of those have the same reward currencies as do personal cards, such as frequent flyer miles from the big airlines and flexible-point reward programs such as Chase Ultimate Rewards and American Express Membership Rewards

Cash back business credit cards

Here are a handful of cash back business credit card options:  

Capital One Spark Cash card

Capital One’s Spark Cash for Business card (annual fee: $95, waived the first year). Spark Cash offers a flat, unlimited 2 percent back.  
Another option: the Capital One Spark Cash Select for Business card, a no-fee version that gives an unlimited 1.5 percent back.

American Express SimplyCash® Plus Business credit card

The SimplyCash® Plus Business card from American Expressd (no annual fee) offers 5 percent cash back at office supply stores and wireless phone services, 3 percent on a category of your choosing, and 1 percent on all else. Bonuses are capped at $50,000 in spending a year.

Chase Ink Business Cash card

The Chase Ink Business Cash card (no annual fee) offers 5 percent back at office supply stores and on telecom services, 2 percent at gas stations and restaurants and 1 percent on all else. Bonuses in each category are capped at $25,000 of spending.

Bank of America's Business Advantage cash card

 The Bank of America Business Advantage Cash card (no annual fee) offers 3 percent back at office supply stores and gas stations, 2 percent at restaurants, and 1 percent on all else. Those percentages can grow by up to 0.75 percentage points more if the business banks at Bank of America. The card’s bonuses are capped at $250,000 in spending a year.

If you have a business and haven’t looked at your credit card use in a while, it could pay to shop around. You could be earning more rewards however you want to redeem them – maybe even to pay for office parties to reward workers or help pay for some employee expenses to help with your company’s retention efforts.

See related: 6 reasons entrepreneurs should get a business credit card, 7 things to know about business credit cards


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Updated: 12-14-2018