Retail staff are being encouraged not to park outside stores, with the council also offering 120 free parks in the Pukuatua St car-parking building on a daily first-come, first-served basis.
The cost to the council for the initiative will be between $20,000 and $30,000 in lost parking fine revenue and about $3000 in marketing and promotion costs.
The free parking initiative applies to all metered parks in the city with other parking restrictions, such as 15-minute parks and loading zones, to remain the same.
It could be put down to Christmas shopping but the city did seem to be a lot busier yesterday with long-term parking places full for most of the day.
Shoppers and retailers spoken to by The Daily Post were full of praise for the initiative.
McLeod's Booksellers manager Fraser Newman said the city was buzzing and the store had experienced its busiest day of 2012.
"We think it's fantastic the Rotorua District Council has given us this 12-day trial period before Christmas.
"For many retailers this has been a tough year. With record high unemployment and a drop in retail spending, it just hasn't been easy.
"People have tightened their belts and the fact parking is free everywhere else [in town] means we just can't compete.
"Free parking, even if just for a limited time, is a Godsend. Customers have been talking about it all day and the word from other retailers is encouraging," Mr Newman said.