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Monday, 8 November 2010

Wedge Card - and the £198,000 funding

In October 2009 RBKC heralded the saviour of local shopping, The Wedge Card. This a credit card sized bit of plastic, that gives the holder discounts and offers at local shops, the idea being that people go to the local deli, the independent clothes store, or the small book shop on the corner, rather than beef up the profits of the chain stores and multiples on High Street Ken or Westfield.

Good idea, in principle.

Wedge Card isn't a council run thing, its a private concern and they were handed £198,000 of council money to help launch the scheme. The funding was given to meet the costs of an intensive three month campaign of a blitz of publicity and to sign up retailers. It was also used to help relaunch the Wedge Card website, production of the cards themselves, other promotional material and project management costs.

So who and how do people get a card?

Anyone who works or lives in the borough can, in the first 18 months get a card free by signing up, or sending off for one. After 18 months from launch (September 2011) the cards cost £10, one pound of which is donated to charity.


What happens to the income, and how does the council get back its money?

The first £90,000 of income will be used to maintain the scheme in the borough, any over and above that amount will be returned to the council. Once the council funds have been returned, the profits will be split 50/50 between Wedge Card and the Council annually.

Sounds fantastic, money for nothing!

You would think so wouldn't you. For this plan to work means there has to be an annual revenue of £90,000, that means at least 9000 cards have to be purchased each year just to break even once the free period ends next year. That wouldnt cover any repayment to the council, just the funds to keep the scheme running. Realistically therefore there would need to be annual card sales of 13,000 to ensure scheme sustainability and to start repaying the council loan.

Hornet has over the last seven days wandered around her hive not far from Notting Hill where there are an abundance of indi-retailers. She could count on one hand those advertising in their stores the WedgeCard, and precious few when asked actively promoted it, let alone knew about it!

Official data of business signed up to the scheme suggests that some 1,200 transactions have been made involving the Wedge Card during two months of this year. Around half of the retailers have reported that they have not had a Wedge Card used in their business. Among the other retailers, the average number of times a Wedge card has been used is just under four.

At the moment unless take up increases significantly there is a real risk of the council losing its investment if the Wedge Card scheme fails to take off.

What the council fail to realise is that the only way to change peoples habits is to affect their pocket, that doesnt necessarily mean only by taking money out, but also the opposite.

The Wedge Card could have been launched in conjunction with the £50 "efficiency dividend" cut from council tax, and provided on a kind of "pay as you go" card to every house, loaded with the £50, less the cost of the card.

That way, the council would get back their loan, the people of the borough would still get their efficiency dividend and the local retailers would benefit as it would only be able to be spent in their shops. Crucially it will start to change shopping habits so that once the credit has run out, the card reverts to just a discount card can be used at the same local shops that people now know about.

Yes it would take more time to set up, but the alternative is a scheme that hardly anyone uses, businesses don't promote, and where there is a risk of the council loan being written off as unrecoverable.

Now that really is a no brainer!

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