Bernal Heights' "Bernal Bucks" program is becoming the start of a new trend on the rise here in the city.
One of the first local currency programs in the country, Bernal Bucks focuses entirely on encouraging local spending within the community and away from big chain stores. The new Bernal Card, introduced in June, is a prepaid Visa debit card that can be loaded with money and used anywhere that accepts Visa. As an incentive, consumers earn a five percent reward on every purchase made at participating locations; simply, for every dollar charged, the consumer gets five cents back.
"[The program] makes it an incentive for people to spend money," said Carlos Brenes, branch manager of Mission SF Federal Credit Union, the institution that backs Bernal Bucks. "It's definitely a way to get people in the door."
However, some merchants do not think highly of the program. "I truly want to give back to my community," said Antoinette Lama, manager of Chuck's Store on Cortland Ave. "But economically, the program wasn't to our advantage."
Co-founded by Bernal Heights residents Arno Hesse and Guillaume Lebleu, Bernal Bucks is similar to other currency programs like Denver Dollars in Colorado and the Fairbuck in Marin County."We wanted to use our buying power for our own good instead of leakage to the Costcos, Trader Joe's, Safeways, and Home Depots of this world," Hesse said to the San Francisco Chronicle.
Many merchants support the system, appreciating the community support and cherishing the relationship between customer and merchant. "We will do anything we can to help our community," said Frankie Chamberlain, manager at the Good Life Grocery store.
"The buck shops here", a recurring motto on the website, emphasizes that participants can choose to redeem their rewards at any participating business or donate it to a good cause. For example, every $200 spent earns the cardholder 10 Bernal Bucks to enjoy at any of the 28 locations.
Mike Denison of Succulence Life and Garden is also an active supporter. "Not only do you get rewarded for shopping locally, but you can choose to give those rewards away to better something else in the community."
Bernal Heights, tucked away in the hills behind the Mission district, has come a long way since the 1960s and 70s. Since then, the crime rate has dropped significantly and the strong sense of neighborhood activism led to the establishment of community organizations such as the Bernal Heights Neighborhood Center in 1979 and increased community support. "This is a very tight-knit community, and I know because my family and I have been here for 38 years," said Lama. "But you still need to be aware of your surroundings come nighttime."
The program initially begun nearly two years ago when Hesse and Lebleu sold stickers that functioned as coupons. When presented, customers could redeem an item at a discounted price or for free from any participating location. However, the stickers proved to be unsuccessful and then introduced a gift certificate alternative, which also experienced similar problems.
Ten percent of each $20 gift certificate spent at a business went to the bank and the merchants received the remainder, Lama said. "Overall, I was losing about 20 percent of my profit, so I decided not to accept Bernal Bucks anymore."
By law, a financial institution is required to keep a certain percentage of money on reserve to maintain stability - a whopping 7 to 10 percent of each deposit made, according to Brenes.
"We're not losing [any profit], and if we are, we aren't losing much," Chamberlain said, when asked if the program causes any noticeable financial losses.
Lama believes the plans are great and the program's intentions are good, but still needs a little more work. "It's more like a penalty than a profit for us merchants," she said.
Stephanie Madrinan, owner of the vintage-thrift shop 31 Rax, recently joined the program. "By joining, it's marketing for myself and my business through advertisements," she said. "Plus, I like the whole concept of encouraging the community to shop locally."
Although Bernal Bucks rewards are meant with good intentions, being able to redeem rewards at any participating location may prove to be detrimental to businesses in the long run. "What if they're spending money somewhere else and then redeem their rewards at my store?" Madrinan said. "I lose an item that I could've made a profit from."
Another currency known as the "FairBuck" in Fairfax, launched around the same time, has had some success thus far. Like other fiscal localism programs, the FairBuck is designed to "localize our community more and build a stronger, resilient community," Pam Hartwell-Herrero, Sustainable Fairfax executive director, told the SF Chronicle.
According to section 3.3 of the FairBuck Project memorandum, the FairBuck board is obligated to keep the proceeds from the sale of collected tokens to, first, serve as a reserve, use in administration and other FairBuck related costs, to repay initial loan to investors, and finally, to fund projects benefiting the Fairfax Community. In addition, one-third of the proceeds must go to Community Projects.
With the new Bernal card, it is one more advantage Bernal Bucks has over other Bay Area currency programs. By initiating a prepaid debit card, it can save money from minting bills and coins and is much easier to carry around. Cardholders add their own money on it and can add however much they want to it, as long as there are sufficient funds.
So far, there are 100 members participating in the program, with 200 applications waiting to be approved. "We're currently working with the founders to come up with new ideas to tweak the program and make it more efficient for the customers," Brenes said.
While the program is still fairly new, it is still early to tell how it will fare out. "I haven't seen the card being used around here too much yet, but I can't see why it wouldn't be successful," Chamberlain said.
