Tax Free Makes Consumers Feel Good

Aug 01, 2003
George Anderson

By George Anderson

Numbers demonstrate tax-free sales days not only boost business but also help
retailers achieve larger margins, as well.

According to an article in USA Today, “There’s a growing recognition
among retailers and savvy mall owners that shoppers are suckers for ‘tax-free’
sales — discounts equal to the sales tax rate. These sales often save consumers
far less money than more traditional 10%- or 20%-off sales, experts say.”

Pam Murtaugh, a marketing consultant, told USA Today, “The rational
consumer would add it all up and say, ‘I’m not getting such a great deal at
the tax-free sale.’ But shoppers, in the end, do what makes them feel good.”

North Plains Mall in Clovis, N.M., is promoting a tax-free sale. Most mall
merchants have agreed to pick up the 6.375% tax. Even the mall’s restaurants
and nail salons have signed on, says Cindy Banister, the mall’s property manager.

Mike Muscato, owner of the All About Sports shop in Clovis, New Mexico says
he gets more traffic from “tax-free” sales days than when he runs a quarterly
30 percent off sale. “People love the illusion they’re pulling one over on Uncle
Sam,” he said.

Nine states including Connecticut, Georgia, Iowa, New York, North Carolina,
South Carolina, Texas, South Carolina, Vermont and West Virginia currently have
tax-free days planned for this year.

Moderator’s Comment: How smart are consumers? What
are the keys to developing loyal customers?

We object to the term “suckers” being used in the USA
Today piece to describe how retailers see consumers. The ones we know see customers
they wish to serve. Making a profit doing it is the point of being in business
in the first place.
Anderson – Moderator

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