Read this Facebook post. Then tell me how this makes marketing sense.
I’ve never understood this selling technique. I love “we’ll pay the sales tax” promos…. they always seem more valuable to the consumer than they actually cost the business. So why exclude your biggest priced items in a %age off sale? Don’t you WANT to sell the expensive stuff as much as you want to sell the less-so? Or even more so… so you make more gross sales, and your consignor is THRILLED that you sold her fur or her David Yurman piece so quickly?
I don’t understand how paying the sales tax on a single $1000 sale is of more concern than paying it for the entire day’s total sales of $1000.
And another thing that puzzles me.
Along the same lines, how does it make sense to have a percentage-off store-wide sale and exclude “items already marked down”? If I assume that it’s a too-stuffed-shop who has this kind of price reduction… aren’t the sale racks taking up space, too? Doesn’t the shop want to clear the old stuff out… actually MORE than they do the new arrivals?
Auntie Kate The Resale Expert 
Here where I live MOST Resale Shops don’t even charge tax anyway, I had a hard time getting customers use to paying taxes in my shop, they feel like they are getting a better deal. Every-once in a while I will hold a 10% off but they like the no sales tax better and its just 7% here
Yes, Elwanda, customer perception is EVERYTHING in retail! Isn’t it interesting to see what your customers respond to? Paying attention to what they like is the key to success, isn’t it?
Even if there is a 10% luxury tax….who cares? The least I would run a sale is 20%. Love the we pay your sales tax idea. And of course you would want to clear out your old stuff and make room for more…to not include already reduced merchandise is foolish.
Thanks, Janice, but it’s not “my” idea; the topic was brought up by the Facebooking store. Many retailers now use this every so often, perhaps in responses to people “showrooming’ their businesses then purchasing online to possibly avoid paying state sales tax. Thank goodness THAT retail challenge is one that we are basically immune to!
When we have a sale its always we pay the sales tax, its 7% here and they get the full amount stamped on their FBC so its a win win
Great! If giving customers credit for the money you have to send to the state works for you, that’s fine. This post, though, was about having a “we pay the sales tax” as an additional tool in your marketing arsenal, a topic that might be useful.
When we have a sales tax sale, we include everything! After all, the sales tax discount is only a 6.25% reduction here. That’s less than most promotions we run!
And is this a tactic you would recommend, Kitty? Does it draw as much attention as, say, a 20% off everything sale (if you do those in your shop)? I’d love if you could answer the 2nd question, too: Do you exempt “previously reduced items” from sales, $ or % off coupons, and the like?
It works better than anything for us. Our sales tax is 9.5% which is high but still it does better than any other sale. We don’t exempt things but if I recall correctly we don’t combine with discount coupons. Why not with discount coupons? Well we’ve already got them in the store that day to buy stuff. If they still have their discount coupon they will likely (at least the customers that come in for our tax free day) will still have that coupon burning a hole in their pocket to come back soon.
But to be honest, we don’t do a lot of coupons, so it isn’t much if any of an issue for us.
Great input, Wendy, thank you. And I see your point about not combining coupons with the sales-tax promo. This concept would have to be handled nicely, so the customer understands that it’s a benefit to her, not a pushy tactic on the part of the business. I’m with you on seldom using coupons, though perhaps in this day and age, they are a necessity.
Only thing I can think of is that maybe that business is located in a state that has additional “luxury” taxes on furs and fine jewelry. Other than that… I’m with you, why wouldn’t they pay the taxes on those high ticket items.
I remember way back when there was a Federal sales tax of 10% on luxury items, but I don’t know if any states still have it? Anyone know?
I loved this Kate!