A "Buy Local Vermont" consumer stimulus pilot program designed to spur spending with local businesses by handing out $30 gift cards roared through $425,000 worth of CARES Act funding in a day, as Vermonters logged on in search of deals.
But the contract for running the first-come, first-served program was beset by technical glitches and some complaints about availability and choice.
The program was run by Boston firm Nift Networks Inc., which was among 13 bidders that submitted proposals to the state. Nift Networks' bid was judged best among 13 bids, the other 12 of which were all from Vermont and included non-profit agencies and media companies, according to bid scoring results provided by the state Agency of Commerce and Community Development.
The bids included a submission from New England Newspapers Inc., which publishes the Bennington Banner, Brattleboro Reformer and Manchester Journal. Other bidders included WCAX-TV in Burlington; Bi-Town Marketing in Wilmington and Dover; Vermont Broadcast Associates, a Lyndonville-based multimedia company and owner of four radio stations; Vermont Fresh Network of Richmond, a non-profit representing restaurants, inns, farmers and artisan food producers; and Wilmington Works, a nonprofit dedicated to promoting downtown Wilmington.
The pilot program, which "sold out" in a day, used federal CARES Act funding to establish a first-come, first-served $30 per person credit for use at about 950 businesses across the state.
Heather Pelham, the state Commissioner of Tourism and Marketing, said she's heard positive feedback from businesses who were pleased to get customers "back in the door," especially new customers they hadn't previously reached.
The intent, she said, was "creating a spark about spending decisions and how [Vermonters] can support local businesses.
"We knew we had a limited amount of funding," Pelham said. "But we found out how much folks do want to support their local businesses, and that's encouraging." And the choice of Nift, she said, allowed the state to kick off the program quickly without spending on infrastructure or administration.
"This vendor had a product where we could do that, and get the majority of funding into the hands of a multitude of Vermont businesses," she said.
The program served as a trial run for a $50 million proposal offered by the Scott administration, part of a $133 million CARES Act-funded economic stimulus package in the restated fiscal 2021 budget. As of Friday, that program had not made the cut in the Vermont Legislature's version of the fiscal 2021 budget, though Secretary of Commerce Lindsay Kurrle on Tuesday had offered hope the state Senate would be more receptive to the proposal.
"The beauty of the program is people definitely want to support local businesses and we know we can do this," Pelham said.
Nancy Koziol owns Couch and Cork in Bennington, a small start-up that plans wine tastings and classes. In an email, she called the experience an overall positive, including assistance from the program vendor helping her decide what package to feature.
"My offer was shown to 178 people and 15 selected it. Of those, two have used it so far. That's nearly 200 people who were given my [business] name," Koziol said. "I also saw a spike in website traffic that day thanks to the promotion."
The only negative, Koziol said, was the response of some on social media who wanted to be able to choose where to use the card rather than try something new, or wanted to use the card at a big box store.
"As a small biz owner I think it could have been better marketed to explain to people that they could view this as an opportunity to try something new, treat themselves or buy a gift," she said. "I think that messaging could have helped. But for a first-time thing I thought it was great and I would absolutely do it again."
Amanda Scull of Westminster said she hopes the state tries again, but for a different reason: "Because it was quite a disappointment."
"I was online right at 11 a.m., and signed up, and didn't get my code for about 40 minutes," Scull said. "I didn't realize I'd only be given two businesses to choose from, and one must have sold out while I was on the page because it wouldn't let me click it. So I ended up with a gift card to a business that apparently only sells $95 tarot readings."
Scull took issue with the fact the program required an internet connection on a weekday, and that it led to a gift card rather than something people in need could truly use.
"We didn't need the money, but I know families that would have really benefited from being able to pay for one night of pizza or school clothes for their kids. And the odds were not in their favor," she said.
Isabelle Alvardo, owner of the Village Roost Cafe in Wilmington, said her business "only got 16 certificates at $10 each, which in the scheme of things is nothing. As a consumer I only got one certificate for $10 and everything else was too far or not appealing."
Pelham emphasized that the concept was trying to match consumers with their interests — a task made difficult by items quickly selling out and the state's commitment to spreading the benefit as evenly as possible. It was never intended to be a discount that could be used at any business, she said.
According to the bid scoring sheet provided by the Agency of Commerce and Community Development, Nift Networks was evaluated highest in the first round of 13 bidders, and again in a subsequent round of three finalists.
The agency said the bid responses were reviewed and scored by agency staff, with follow-up questionnaires sent to the top three proposals "that allowed the selection review team to better understand their proposals based on the funding levels and program parameters approved by the Legislature."
The decision to select Nift Networks was unanimous, the agency said.
"The NIFT proposal demonstrated the strongest approach to drive consumer spending directly to businesses in an effective and easy to use approach with a high percentage of direct consumer incentives relative to administrative, outreach, and marketing costs," the agency said. "[Nift] is able to quickly establish and launch the program, get businesses signed up, and increase consumer spending at local businesses within a four-month timeline."
The firm collected 15 percent, or $75,000 of the $500,000 allocated for the program, Pelham said.
Vermonters were asked to register on Tuesday starting at 11 a.m., to have redemption codes emailed to them in the order in which they were requested. But high initial demand slowed the delivery of those codes to a crawl — prompting Kurrle to take time in Gov. Phil Scott's COVID-19 briefing on Tuesday to assure customers that the codes were on the way.
Funding was allocated to different regions of the state, and consumers were linked with potential offers by location and interest. "Ensuring equity slowed down the issuing of the codes, as so many people signed up to participate at once," ACCD said on the program website.
The offers ranged from $10 at casual eateries to $150 at hotels and inns.
Customers have until Oct. 31 to redeem their offers. It's anticipated that Vermonters will spend twice the amount of their offer upon redemption, ACCD said on the program website, adding an additional $425,000 to local business revenue.
Greg Sukiennik covers Vermont government and politics for New England Newspapers. Reach him at firstname.lastname@example.org.