Shop Local is a time-honored slogan used by many cities and business associations in marketing campaigns attempting to increase sales – and sales tax.

But more often than not, the program is limited to holidays and other promotional periods. Sometimes participating businesses are required to absorb the cost of promotional discounts, limiting participation.

A New Approach

More than 50 municipalities have launched a different Shop Local model, powered by an application called Open Rewards. CEO and founder Sophia Zheng said the public-facing app simplifies the process for both customers and retailers, increasing participation significantly.

“For individual local businesses, their resources are limited. ” Zheng said. “This is a dynamic, flexible way for cities to provide a collective platform to all local businesses and give them the scale that they couldn’t have on their own.” 

Pasadena Pilot

The City of Pasadena was able to allocate part of its Shop Local budget last year toward trying out this innovative approach. Christopher Page, project manager in the City’s Economic Development Division, pitched using $10,000 to create a Shop Local program aimed to help small businesses.

“I did the research and chose Open Rewards because it offered the ability to use our business license data base,” Page said. “Businesses were able to participate automatically. I probably added about a dozen or so (businesses) manually after we started is all.”

The program started in October 2025. Pasadena opted for a model offering 5% back on every purchase at eligible businesses and restaurants. Customers accumulated rewards in their accounts, and were able to redeem the cash (up to $200) for purchases at any eligible retailer or eatery.

What makes this stand apart from most Shop Local programs is that the money to pay for customer rewards comes from the City, not the business or a Property-Based Improvement District (PBID) – as is typically the case for traditional programs.

“I emphasize that this is a pilot program now. If we’re looking at the program’s sustainability long-term, we may eventually be looking at a shared cost model,” Page said. “We have three PBIDs in Pasadena. We’ve already committed the city to covering the administrative costs.”

Judging Success

Pasadena has extended the pilot program through the end of June, and Page said the City Council likely will be asked to consider continuing Shop Local in the next fiscal budget. The numbers explain why.

That $10,000 initial investment has generated $122,000 worth of impact to date. A 32 times rate of return is projected. There now are nearly 1,100 customers signed up, with some living outside Pasadena – bringing new money to the city. And there are more than 1,100 businesses where people can Shop Local.

Page said the Open Rewards application allows him to track response down to individual businesses, and a boost for small shops has already become obvious. For example, one small independent bookstore has recorded 66 Open Rewards purchases since the program began.

Independent local businesses are the sole target of Shop Local in Pasadena – national chain stores are not included.

Another Open Rewards option allows for a survey of customers. Page said that in a sample of more than 500 people, a whopping 85% said the Shop Local rebate program influenced their decision of where to shop.

Maintaining Flexibility

Sophia Zheng said that different cities structure their programs differently to fit their specific situation. While Open Rewards maintains the basic background tech, city officials can and do customize the app for their own Shop Local program.

“It’s designed to be a dynamic, flexible lever to drive local spending,” she said.

Page agreed, noting that he can still set up holiday promotions – 10% return for Christmas, for example – in a few minutes and a targeted marketing campaign. Even so, it is a turnkey operation, he added.

“It works well for year-round promotion,” Page said. “At the same time, we can do special things. We’re planning a push for Small Business Week in the first week of May.

“Marketing is important,” Page added. “We’re considering doing business highlights and the like if it becomes permanent… We can do a lot.”

Shoppers don’t need to be Pasadena residents to participate. That brings outside money to Pasadena businesses.

For more information about Open Rewards, go to openrewards.com. The app is available at all app stores.

For more about the Pasadena Shop Local program, click here. The city website is www.cityofpasadena.net.

© Sunstone Cities LLC

About Sunstone Cities

Sunstone Cities is an economic development consulting firm that helps local government leaders unlock economic development, new business formation, and job growth. We partner with municipalities to identify and capitalize on opportunities for revenue growth and investment. Our team of experienced local government professionals leverage data-driven insights, industry expertise, and public-private partnerships to help cities revitalize their economies, attract new businesses, and better monetize their community assets.