Retail "Showrooming Fee": Interesting & controversial

I think of all the things I might by online, food wouldn't be one of them. I don't think that approach would work well in the toy train market, it is hard enough to get people to come into a store.

Personally I don't think anyone has to worry about this concept coming to your local LHS, or for that matter, anywhere else. It is hard enough to compete with on-line sellers and to go out of the way to make matters worse, makes no sense at all.

 

This retailer should figure out why people aren't buying and adjust his inventory, price points, or customer service. What he is doing is driving customers away.

Very interesting...kind of stupid, but nevertheless interesting.

 

A more real possibility--according to what's on the national news this very day--is the renewed push to tax Internet transactions (long overdue in my opinion).  Cash-strapped states are really pushing hard for this now.  At some point it is somewhat inevitable that this WILL happen, and I think this will be a good thing for local, brick-and-mortar businesses because it will help to level the playing field just a bit.

Makes perfect sense to me Allan...NOT!!!  Why do people think the solution to every ill in this country is MORE taxation???  Here in Maryland, our Governor thinks we need another gasoline tax!!!  Make me understand, Allan!!!

I too think this retailer is just driving away his limited customer base.

 

Now on the online tax issue:

Rather than make retailers deal with the money, why not just inform the state who bought how much and let them collect it themselves.

We have no sales Tax here and it will make our retailers (READ LHS) change all his Acounting software and add paperwork overhead with ZERO gain to the store.

Let them Collect their own tax !

I hear you Ron ! After 50 years, I moved from the state of Maryland .
I had enough!!! As for charging to go into a store, it will drive customers away. I know that I wouldn't shop there.
Mike

The truth of the matter is that most likely the majority of people here, on this very forum, are already violating the law when it comes to Internet transactions. 

 

Many states require taxes to be added to a sale IF the seller has a licensed business presence in that state (or multiple states).  That's why you see taxes added on purchases you already make from some online merchants and not from others.

 

Many states also have what is known as a "use tax" (or similar name--see Wikipedia for full definition) which requires you--the individual taxpayer--to report, on your state tax return, the merchandise you have bought from sources out of state.  Raise your hand if you fully and accurately do such reporting  now  .

I agree that internet state sales tax is coming like it or not.  Now I'll actually have to drive to Just Trains in beautiful tax free Delaware.  Folks close to Delaware have a shopping gold mine because of its tax free status.  Also handy for beach trips combined with back-to-school shopping for kids clothes, Rolexes, etc.  Back to the topic, though, the "just browsing" at a $5.00 fee is a sure way to drive away customers.

Imagine tableholders at York charging a fee for "just looking"

But why do we need more taxes...for the good of WHOM???  Must I drive all the way to Ohio, and throw tea in your toilet???

Although not the same, if you think about it isn't that the same as an entrance fee to a train show. Still it is pretty ballsy to charge a looking fee, but you have to give them credit were reading about on the other side of the planet 

We did some "futurism" brainstorming at work for a client and concluded that this would probably be a real type of store in the future.  You pay, say, $5 to enter, where you can't buy a thing, but you can look at various stuff, touch it, look at it all you want, and make sure it's what you think it is, before you whip out your iphone or go home and order it from your favorite on line retailer. 

 

 

The exact opposite of my Pittsford Wegmans grocery store.  Let's see how that works out!

 

The Pittsford Wegmans is the flagship store, and is a tourist destination unto itself.

Here in Europe, we don't have any option to avoid taxes by buying online.  The price of goods are normally shown including sales tax/VAT, and this is what you pay. If I buy anything on-line from another country within Europe, I pay the tax rate applicable in that country.

If I buy anything from outside of Europe, then I pay the VAT & duty applicable here (Currently 21% of the total value of goods, insurance and shipping charges.) plus an 'Administration fee' (Normally about $17.50) for the privilege of being charged. These costs are calculated by the customs people when the goods arrive in the country, and must be paid in cash to the postman when the goods are delivered.

As Allan stated above, in theory, those of you in the USA should be declaring any out-of-state purchases on your state tax returns, and then paying the applicable Use Tax. (Normally the same rate as Sales Tax.) Don't be surprised when the option to avoid these taxes disappears and you start being charged tax on all purchases.

I don't think I'd patronize a business that charged a fee for "just looking". Not everybody who enters a store to look around is "showrooming". Maybe they are just killing time waiting for their spouse to finish shopping in another store. Maybe they are just thinking about purchasing a new computer, TV, or what-have-you.

 

Not a problem around these parts: LHS have become mere order takers and possibly repair stations, carrying no inventory to "showroom."

 

If you want to showroom you attend York. "Showroom" fee: ($35 to join the TCA + $20 after Mar 1, for meet entrance). (For added York benefits see the "York forum").

Don't we already pay that "looking" fee by paying an admission price?  And, we are not reimbursed when we buy something either.

 

Rick

Hey, I guess that's not really bad.  If you pay $5.00 to get in wait till they charge you $10.00 to get out.  LOL LOL LOL

 

Rick

How about charging you for looking in the window or just walking by?

 

Jerry

Yeah, this'll raise sales.

I suppose that next they'll have some bruisers patrolling the sidewalk to grab passersby and force them into the store to buy things.

Who dreams up ideas like this? No, wait: who is the company owner that thinks this is the solution to poor sales?

I work weekends in a golf pro shop.  We're always having folks come in and "look around", knowing they'll go elsewhere before they decide.

 

The first thing my boss does when he gets in merchandise is look up on the internet at the golf stores (like Golf Galaxy) to see what price they're charging for the same items.  He either meets or goes below their prices, a lot of LHS don't do that.

 

If we charged a $5 fee for just looking, I expect we'd lose more than customers that buy from the pro shop, we also lose golfers that come out regularly.  People don't like to be gouged.

 

I'm currently looking around for new tires for my car.  I called a local tire dealer yesterday to start my search and plan on calling others in the coming weeks.  Should they be charging a "fee" for calling around?  IMO that's the best way possible to lose customers.

If we ever a contest for the best/funniest/most entertaining post, remind me to nominate this one. 

 

Bob

Haha

 

One thing that wasnt mentioned yet is the stores where they have a high rate of shoplifting.  Maybe if they dont have 5 bucks to get in they werent going to buy anyway, or a least the store would get 5 dollars towards their loss.

 

I am all for private businesses to do as they please. You tick someone off one time and hundreds of people will hear about it.

 

I do know that just about every business owner is hanging by a string as it is. Time for less taxes in all ways.

within 10 years online stores will have virtual reality showrooms.

 

the only brick & mortar stores left with be food markets,

car service & gas stations, home & garden centers and pawn shops.

The Internet sales tax, like every other sales tax, is inherently regressive. Governments want it as a source of revenue, to be spent buying votes for legislators. Local merchants push it on the self-delusional basis that the advantage it gives to Internet sellers is costing them sales. Arizona just cut a deal with Amazon where Amazon will start to collect state sales tax. I've got news for them. I shop more and more on the Net, and less and less locally, and a lousy 7% on the price isn't going to make a dime's worth of difference to my shopping habits. Why? Well, with gas at $3.50+ a gallon, a trip to the local mall costs me 6 bucks+ before I set foot in the store. Then I've got the wear and tear on the truck, the risk of an accident or a robo-ticket, the hassle of parking at the mall, and the significant possibility that the store at the mall isn't going to have what I want anyway. Plus the time wasted driving and wandering around looking for a sales assistant, who is likely to be some slacker who doesn't know anything about the product anyway. Time means more than money to me anyway. I can sit at my computer and click a mouse and get most anything I want, except food, booze, and big heavy home improvement items, for less than at the mall and with 90% less hassle. So 7% tax is going to send me back to the ***** mall? When pigs fly. Besides, most of those businesses aren't locally owned anyway. Why should I favor Wal-Mart over Amazon?

 

I do still patronize our sort-of-LHS for whatever I can get there - paint, tools, scenery, the odd piece of track. They don't have much 0 anyway. I go to Ace for hardware - you need to look at that kind of thing, the Net won't do. Food. booze, and most clothing I will still buy locally. If I need a new pre-hung door or shop vac, I want to see it before I buy. 

 

As to the "showrooming fee" - it's imbecilic. Having done some small business consulting, I thought business owners had already thought of every possible way to shoot themselves in the foot - but I was wrong; here's a genuinely new and innovative way of committing financial suicide. In the immortal words of Robert A. Heinlein, "Never underestimate the power of human stupidity."

A near-by hobby shop had so much shop-lifting by "customers", they now have a "club"

you have to join to shop there.

So at least they now have the names of the thieves.

I have not been there since "the club" started.

I do not like being "tracked" by stores.

 

Maybe I'm just wasting bandwidth by replying to your frustration filled rant but here's some general info if needed.  Although the sales/use tax tangent is off topic to the original "showrooming" thread the sales/use tax tangent has evolved into the conversation.  Ron, the "Use Tax" is the buyer's home state's method to obtain sales tax revenue it would otherwise collect from the buyer's instate purchases.  If you recall during the early internet days, the Federal Govt in an effort to increase the use of online retailing, exempted online retailers from collecting the respective sales tax from out of state purchasers.  The Fed'l Govt. cited that the time and cost to an online merchant to  accurately collect then remit the sales tax for various customers' states was too burdensome and would also inhibit the growth of online retailing than obviously spans beyond state lines.  Meanwhile, purchaser's home states were not permitted by Fed law to collect revenue from a "sales" tax on purchases that were generated by an in-state user but out of state retailer.  To work around the inability to collect this sales tax revenue came the creation of a state's "use" tax which is currently reported via the "honor system" generally on your state's annual income tax return.   Does the use tax effectively and efficiently make up for the unremitted online/out of state sales tax that State's feel they should receive?  No, I seem to recall revenue statistics indicate less than 10% of those who purchase online out of state are honest with their annual "use tax" reporting.  What now?  States are battling back against the multi-state online retailers with a nexus approach.  If that retailer or any of its subsidiaries have a physical presence in the state the retailer is responsible for collecting and remitting the sales tax.  Furthermore, developments in sales software and low cost computing make the original "burden on the retailer" argument ineffective against the ability to collect and remit to multi-state jurisdictions.  Lastly, state revenue departments now have the technology to determine and potentially track the amount of out-of-state sales product that enter their state.  So if you're eventually audited, don't be surprised if your state has more information than you would first expect.

 

As for your "gas tax" situation, it's been widely reported that many states have seen their overall gas tax revenues that go to highway funding projects greatly reduced due to less gasoline being purchased because of the greater number of higher MPG efficient cars on the roads.  The gas tax is a fixed per gallon amount and not based on the current at the pump price per gallon.  States are trying trying to "create" ways (taxes or fees) to supplement this reduced gas tax revenue with new auto registration fees or taxes.

 

Regarding your tea in a toilet ...first drive to Michigan and flush twice because it's a long way to Columbus.

 

I'm told those are called "Peep Shows".

 

Showrooming in Local Hobby Shops occurs.  But hopefully a LHS can offer a competitive price and demonstrate LHS value through good service to make up for any price difference.

We have Costco, Sam's Club, BJ's, etc. that already charge a fee to enter the store.  Costco, especially, is a VERY successful operation.

 

Perhaps the retailer John originally mentioned needs to have customers join a "club".  The club "dues" allow entry to the store.  I agree that this is a retail business model that has potential to destroy the retailer, but if done correctly, it can be successful.

 

I doubt any LHS could successfully adopt this business model, but an interesting discussion nonetheless.

We are experiencing the consequences of the globalization of economies and societal changes. I don't believe anyone has the answer. You have all posted examples of the effects at various levels. There are sea-changes that we have not experienced in a few generations.

The business models of the recent past(5-10yrs) will not work any more. The acquisition of goods and services requires different methods. The way governments operate obviously doesn't work anymore. 

 

The shop owner's cover charge is their way addressing the change. Quoting Lee Willis' signature " If no one has ever done it that way, it might be fun to try". If that vendor has a specialty product that I like, I would adapt to the new process. The naysayers(experts) are basing their opinions on what used to work. Only time will provide the answer. Someone remember to check if they are in business a year from now.

 

How we find ways to do what we need to do in all of this is exciting and can be difficult.

I am trying to observe and enjoy the excitement of the change. Life in the 21st century.

 

 

 

The $5 fee will be deducted when goods are purchased.

 

I DON'T think it will stop "showrooming"

 

If you come to just check prices you don't purchace anything.

 

If you don't purchasing anything you don't pay anything.

 

 

 

Makes perfect scense - not.

 

Yep!  I'm something of a regular at the local Sam's Club.  I go there whenever I need to buy something in bulk (paper towels, etc.) and for some of the baked goodies like cinnamon rolls.  Also may buy my next large screen TV there since they have darn good prices.  Show your membership card to enter and show it again at checkout.

 

By the way, that story about the $5 charge for looking is all over the national news this morning.  As Pat noted, I seriously doubt it would work at the LHS level, but I can't begin to tell you how many dealers I've talked to over the years who have that same problem with "customers" coming in; taking the dealer's time to "examine" merchandise and ask questions; and then turn around a go buy the item via the Internet.  Gives expanded meaning to the term "bottom feeder" (which I like to use from time to time because it serves as a reminder to those who are, and it's kind of fun to see them vigorously protest). 

This certainly put the Camera Shops out of business. "What do you recommend?", "How does it work?", "Bye". On the other hand, film and film processing was a big part of their income...so who knows.

I am amused, however, when supermarkets wail about stores like Walmart selling food items. Wonder how many drug stores, florists, etc. the supermarkets closed down?

Having worked in a camera store when I was in college (well before the Internet, of course), I can well imagine how that approach really had a negative impact on camera stores.  Even in the digital age it takes a great deal of time to explain all the features of a particular model and to show how to work them.  Then to have the "customer" say something like "Well, I'll give it some thought and come back later"...a sure sign that you won't see the person again, UNLESS something goes wrong with the camera he bought online.

 

Hmm...does that last sentence, in particular, ring a bell with any train people out there?

Oh yeah! If I had a dollar for every time someone brought in a loco for me to check out that started with the line, "I bought this on-line, but it doesn't work...", I could have retired long ago.

 

You like taxes?  Try this idea on for size...

 

http://www.foxnews.com/politic...overnment-tax-email/

 

I am a business person and you have to cast a large net to get them in. Then, you have to keep them in. Prices are one factor, but there are other factors: excitement--you need to generate excitement. Walk into Nicholas Smith, for example, and trains beckon in a way unlike how the internet beckons.

       
       


Depressingly true.

On topic I often go to stores for ideas and may visit several stores or make multiple visits to the sme store before deciding on what I want. A service fee, which is what this would be, would reduce these visits, and nudge me toward more online shopping.

But, I want to feel and see things. I am in the apparently extreme minority who will pay for quality, support, and service.  I consider many so-called "bargains" a fool's game.