Buying Christmas presents online means shopping with an edge - a double edge

By Rose Hooper

The last Christmas of the century heralded a shopping sensation. Santa and his reindeer are not the only figures traveling through space. So are online shoppers as they click their mice to make cyberspace gift purchases.

For many businesses in Jackson County, online shopping provides an edge - a double edge.

Merchants benefit

Dillsboro merchants are benefitting greatly this season by their online presence, said Andy Smith, president of the Dillsboro Merchants Association.

"For many of the merchants, it's the first year they've been up and running on the Internet," said Smith, owner of the Village Studio. Even if they don't have their own independent Web page, they are accessible through dillsboro www.dillsboromerchants.com

"I had a customer from Tennessee who found me online because of a particular artist we carry," said Smith.

Bill Lee, owner of the Time Capsule, attributes 25 percent of his sales to online business. Christmas time is good for Dillsboro businesses who attract holiday shoppers, Lee said.

"But my business is steady all year round because I sell online to a global market place." Although Lee, who specializes in used, rare and out-of-print books, does not have his own Web page, his Internet presence is through a database for booksellers.

Town hurts

While online shopping may be good for an individual business, overall, it hurts the town, said Mayor Wade Wilson.

"When you buy something from the Internet, you don't have to pay taxes. For a town, that eats into our tax base," said Wilson, explaining that municipalities receive their tax base from the state. "The state collects taxes, and what we as a town receive is pro-rated and funneled down... like a domino effect," he said.

That's the law

President Clinton signed the Internet Tax Freedom Act into law in 1998. That law imposes a three-year moratorium on new state and local taxes for online transactions and sales. That leaves some local officials concerned about the long-term impact of the emerging electronic marketplace on local revenue bases.

Losing a policeman

By 2003, electronic sales are expected to amass six percent of total retail spending. For the town of Sylva, a 6 percent loss in state revenue would mean $21,900, said Mayor Brenda Oliver.

"Realistically, that could take away one of our policeman," Oliver said. "People will have to pay for services one way or the other. What we lack in sales tax, we would have to make up for in property tax."

E-mail fire truck

At a recent national conference for municipalities, Oliver heard it put this way, "You can shop online and do your banking and business online. But if your house catches on fire, you just might get e-mailed a picture of a fire truck because your municipality can't afford a real one."

Avram Friedmen of Friedmen and Sun Access Store attributes 80 percent of his sales this year to online transaction.

"I don't think my online sales hurt the town of Sylva - just the opposite," said Friedman. "Most of my sales are from out-of-town customers. They're paying the money to me, and I spend that money here in town."

New breed of shoppers

Friedman targets a new breed of savvy computer shoppers. They don't like malls or crowds. They don't buy mainstream products at large discount stores.

Instead, they are environmentally conscious and buy recycled and earth-friendly products. They want their paints to be oil-based, their cleaning products to be citrus-based solvents and their personal products to be allergy-free and herb-based.

Oliver described Online shoppers as falling into four categories selection shoppers, convenience lovers, money savers and smarter shoppers.

Research Internet, buy locally

E-commerce's double-edge sword also applies to local retail businesses like Venture Out. Suppose, on your Christmas gift list, is a high-dollar, sub-arctic, name brand tent. Would you be more tempted to purchase it online if you didn't have to pay sales tax?

Mona Gresky, co-owner of Venture Out, which does not have a Web presence, said online sales adversely affect her business in lost revenues.

"But, on the other hand, people search online for a product, find out all the information they need, then they come to us when they are ready to make their purchase. We've been in business since 1988 and have a loyal group of supporters," said Gresky, who, along with Leslie Rojohn, started the first woman-owned camping store in North Carolina.

Wal-Mart to go online

The large crowds, heavy-laden with packages, at the local Wal-Mart might convince people-watchers that the majority of people here do not shop online.

"Yes, business has been wonderful this season," said assistant manager Amanda Carey. "Online sales from other companies haven't really affected us here."

But online is a good idea, Wal-Mart has decided, and in January company officials plan kiosks in a variety of its stores.

"They will be free-standing units with monitors where individuals can log on and search for something in another Wal-Mart store. The customer will be able to order it and have it shipped to their local store or to their home," Carey said.

Book Sense

For the first year ever, City Lights Bookstore has felt heavy treading from such online giants as amazon.com.

"We're feeling the pressure," said owner Joyce Moore.

"But people still like to touch and feel what they buy," said City Lights customer Debbie Collins. "You really can't judge a book by its cover. That's why I come in here and browse. I like to look at the pictures in a book to know if it will make a good gift for my grandchildren. I don't shop online because I don't like my credit card number floating around in space."

To fight the giants, Moore said the American Booksellers Association Board are launching a Web site called BookSense.com.

"The venture will give us independent bookstores a chance to market and sell books competitively over the Internet," she said.

One of the unique features of the new site, Moore said, will be the availability of gift certificates. "You can buy a gift certificate for your mother in Florida, your son in California and your old college roommate in New York, and they can be redeemed in any bookstore that participates in the Book Sense program."

Convenience vs return policy

Most online shoppers prefer the convenience and ease of e-commerce. But what if that expensive wool sweater you purchased for Uncle Al doesn't fit? Or maybe it makes him itch? Can you return it? The double-edge sword of convenience is how convenient is the return policy?

Who doesn't like the idea of holiday shopping from the comfort of home? You don't even have to get dressed. There's no crowded stores, no pushy shoppers, no traffic and no road rage drivers. But, as Oliver and Wilson pointed out, there's also no state or local sales tax.

Just asking fairness

Municipalities aren't against the electronic marketplace, the mayors agreed. "We just want to protect state and local revenue bases and protect our local merchants by ensuring business and tax equity," Oliver said.