In today’s economy, consumers are growing fonder of the coupon every day. From Groupon to Living Social, marketers and consumers alike have proven that no matter what may change in their world, everyone still loves a good deal. But what is the threshold for getting a customer in the door? Groupon and Living Social have mastered getting customers in the door by requiring pre-payment of services. I have recently become a Groupon user myself – unable to pass up the over 50% savings on services I would normally pay much more. I’m also a fan of the coupons I receive from my favorite retail stores, but getting me in the door is somewhat of a calculated process.
One of my favorite coupon campaigns is the Kohl’s scratch off card. It can be anywhere from 15-30% off of your entire purchase. Living in the state of Tennessee, I consider a 15% coupon to actually be 5% savings, since our sales tax rate hovers at 10%. A 15% coupon doesn’t usually get me in the store. Give me 25-30% and I am there. That’s a true 15-20% savings after considering the state sales tax rate.
A 15% savings coupon holds completely different weight for someone in Tennessee, Washington, or California in comparison to a shopper in, say Virginia. While the majority of the country comes in around 7-8 % state sales tax, there are several states with no sales tax at all. There can be as big as a 10% gap in the true savings for a consumer in California vs. Montana for the same coupon face value! See reference below to get a better idea of what consumers are paying in sales tax.
Aggregate rates shown here are weighted averages that include county and city rates.
Tax Rate Map -The Sales Tax Clearinghouse
State Sales Tax along with the combined City and County rate
By: Meggan Grear
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