Here’s an interesting twist on the continuing saga taking place nationwide on the issue of online sales taxes.
Overstock.com, which follows only Amazon on the list of web retailers that stand to lose the most from affiliate online sales tax legislation sprouting up in various states, has come up with a new promotion that seeks to take some of the bad publicity from the issue and turn it into a reason to reward loyal customers.
The promotion, which will be available only to shoppers in Illinois, New York, North Carolina and Rhode Island (states that have already enacted affiliate online sales tax laws), will take money that Overstock normally would spend on its affiliates in those states and direct those funds to its best customers instead.
It’s a pretty innovative idea, if for no other reason than it lets Overstock put a positive spin on something that has been nothing but a headache for online retailers and shoppers as well.
Much like Amazon, Overstock has chosen to end relationships with affiliates in states that have enacted online sales tax laws that it considers to be unconstitutional, rather than keep the partnerships going and be subject to paying more in taxes as a result. While this has created a void in the total number of Overstock affiliates, it has apparently also led to a bit of a financial surplus.
And it will be Overstock’s biggest spenders in Illinois, New York, North Carolina and Rhode Island who will reap the benefits of that surplus.
Overstock customers in those four states who spent at least $300 on the site last year will receive a free membership in the company’s Club O Rewards program, normally a $20 value. Club O members are entitled to special promotions, free shipping and 5 percent rewards on all purchases, and new enrollees as a result of the promotion will also get $10 in their Club O accounts as well.
With an estimated 150,000 customers in the four states eligible to cash in on the promotion, it should cost Overstock about $4.5 million to implement. That is, however, assuming that every single customer receives both the Club O membership and all rewards points. Regardless, it’s a heavy investment in securing customer support for Overstock’s affiliate decisions and one that we think most shoppers will take advantage of.
Live in one of those four states? Planning on taking advantage of the offer? Leave us your thoughts and comments!