Contrary to the opinions of Mainstreet and the media, I do not shop online to avoid paying a sales tax on my purchases.
Congress, as you may or may not know, is considering a bill that would require online websites over a certain dollar volume of sales to collect sales taxes from their customers. The bill passed in the Senate; the House may or may not take up the matter later this year.
The media largely seem to refer to this bill as ‘the internet sales tax’, and people discussing the matter are screaming that the government is imposing yet another new tax on them. For the record, the tax already exists; it’s called a use tax. If you buy something in another state, and bring it home, you owe your state the use tax on that item. The tax is the same rate as the sales tax; the difference is that you’re supposed to remit it to the state, rather than give it to the retailer so he can send it to the state.
Most people don’t pay the use tax — they don’t know about it, can’t figure out how to report it properly, or just decide not to pay it. Nevertheless, it’s a real tax that people owe when making a purchase out of state.
However, even if the bill passes, it won’t stop me from shopping online. For me, the ‘lack’ of a tax being imposed on my online purchases is not the main reason I shop online. It’s not even on the list of reasons why I shop online.
Selection. At the top of my list is selection — or rather, the lack of selection in regular stores. I want to purchase a new laser color printer-scanner. Over the last week, I’ve browsed through Best Buy and Target, Staples and Office Max, even stores specializing in computer equipment. Each store offered, at most, three or four models — a low-end, a middle, and a high-end (extremely expensive) model. When I search online, I come up with dozens of models, at all prices, with a variety of features. If I can get a model with the features I want, and only those I want, why would I buy something that has vastly more features than I need, or settle for a model that doesn’t allow me to do everything I want to do?
Unique products for my tastes and styles. I live just outside Philadelphia, and so I have access to numerous department and specialty stores. Yet I often can’t find the things I want in the style I like. Last summer, I was looking for a simple necklace to go with a new outfit — I wear mostly sterling silver and natural stones. I am not kidding when I tell you I visited four department stores, and five other chain stores, and saw the exact same necklaces in every store. I hopped onto Etsy — and found my necklace in five minutes. Okay, so I had to wait two days for it to be delivered — I didn’t mind, since I had something I wouldn’t see on twenty other women at the party.
Easy, unlimited returns. When I buy something online, most websites have very open-ended return policies, as opposed to the stores’ ever-more restrictive policies which limit the time to return an item and set numerous conditions on that return. If I wear a pair of shoes, and the heel breaks off after three wearings, I can send it back to the site and get a new pair of shoes. Contrast that with my last experience trying to return a defective pair of shoes to a department store — I was told to contact the manufacturer; the manufacturer told me to take the shoes back to the store. I ended up tossing them out.
Saved Time. Shopping online, once I’ve established an account with a site, saves me time. Also gas, but mostly time. Let’s use Star Wars action figures as an example. The last few years have been miserable for collectors — Hasbro’s distribution problems resulted in stores getting new figures only occasionally and randomly. You could spend the day driving from Target to Walmart to Toys ‘R Us, and the only thing you would buy would be more gas for your car. Or, you could hop online to Entertainment Earth or Brian’s Toys or any of a dozen other sites and find exactly what you wanted in just a few minutes.
Price. Price actually ranks fairly low on my list. Yes, there are lower prices on some things online. I’ve also seen higher prices online. I like Essie nail polish. I can buy it for $7.79 at Target. Online, I usually find it for a flat $8-9.00. Yet I now buy it online — because the stores only carry some of the colors, and the ones that I want are generally not in the stores. Same scenario with Star Wars toys, or certain shoe lines. You can find your item for the same price — or cheaper or more expensive — online. The price disparity all depends on the website, the item you want to buy and the availability of the item in stores in your area.
I have many other reasons for shopping online, but those are the main ones. As stores carry less and less merchandise, I end up shopping more and more online. A case in point? Barnes and Noble. I used to buy a lot of books at Barnes, as well as magazines and endless cups of coffee. However, as the years have passed, Barnes has decreased both the number and types of books they carry, branching out instead to selling toys and other items. I’ve been told that they took this step because of decreasing book sales, as a result of online purchases for Amazon’s Kindle and their own Nook.
However, for me at least, it’s led to purchasing even more at Amazon. Now, some of that is because I’m digitizing my entertainment, to clear up clutter in my home. But it’s also because I can’t find what I want at Barnes anymore. I spot a new release in the mystery section — but it’s the third book in a series. Unless the author is immensely popular, Barnes will not have the earlier books. To read them, I’m going to have to go to Amazon (I already had Kindle before the Nook came out, and so I keep buying there rather than have two different sources for my novels).
And if I have to buy books one and two online, I might as well wait and get book three there as well, defeating Barnes’ purpose in carrying less books. Instead of cutting back on their overhead by stocking fewer books, it’s cost them a sale.
Nevertheless, the Mainstreet retailers are pushing for passage of the ‘internet sales tax’ bill, because they see it as ‘leveling the playing field’ between stores and websites. If I’ve understood their statements to Congress and the media, the stores believe this bill will result in people returning to shop in stores, as opposed to online, because they’ll have to pay the sales tax wherever they buy something, and therefore they might as well shop in a local store.
However, if and when the bill passes, I’ll still be shopping online for many things. For all the reasons I listed above, I often have an overall better shopping experience online than in a store.
And that is not good news for Mainstreet.