Retailers hope to cash in with online sales

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SALT LAKE CITY -- Is Cyber Monday all it's cracked up to be in this holiday shopping season? This time of year is crucial to Utah-based online retailer sells all kinds of outdoor gear. The folks here describe this season as their "bread and butter." But they say Cyber Monday itself is not a big deal to them.

Matt Pebley, with, says, "Probably in two more weeks we'll see our busiest time, and then it starts tapering off ‘til Christmas a little bit."

Cyber Monday is the beginning of crunch time for retailers. Backcountry's prices and shipping deals make them competitive, and it's a tough market.

Major retailers are trying to attract customers by flooding e-mail boxes. But that might just spark shoppers to wait for better prices later. In fact, based on offers sent to us, discounts changed, not necessarily for the better on Cyber Monday. For example, J. Crew offered 20 percent off everything last week; the deal was 20 percent off sweaters only today. Banana Republic cut prices 30 percent around Thanksgiving; 20 percent Monday. And Saks 5th Avenue offered up to 60 percent off some items, but that deal ended Saturday.

Retailers report some optimism for Cyber Monday

The signs may be a bit subtle. Retail analyst Marshall Cohen with the marketing research company NPD Group says more shoppers appear to be buying items for themselves as well as others -- something he didn't see last year.

Also, more people are actually making purchases rather than browsing.

"Traditionally Saturday and Sunday are much more of browsing days and not really a purchasing day. Right now it looks like 30 percent of the consumers are actually making purchases," he says.

The Salt Lake Chamber reports Black Friday sales are encouraging. Several retailers report increased sales compared to last year, which makes them optimistic overall this season.

Should online purchases be taxed?

Heavy on line shopping is attracting legislators' attention too. Last year, a University of Tennessee study estimated Utah missed out on $88 million in sales tax revenue. That's because sellers from out-of-state, like L.L.Bean, and Home Shopping Network don't collect tax at the point of sale. Retailers with a Utah presence see that loophole as unfair.

David Davis, with the Utah Retail Merchants Association, says, "We feel strongly that there ought to be a level playing field."

People are supposed to report the purchase at tax time, but most don't.

Changing the law goes all the way to Washington, where Congress is considering a deal to create a nationwide sales tax standard.

Warning for online shoppers

Meanwhile, the Utah Department of Commerce is warning online shoppers to mindful when looking for holiday deals.

"The holidays can bring out both big sales and big scams to unsuspecting consumers trying to save a buck online," said Francine A. Giani, executive director of the Utah Department of Commerce. "Make sure you carefully review the terms of sale and confirm that the site is secure before typing in any credit card or personal account information."

During 2009, 27 percent of all consumer complaints received by the Division of Consumer Protection were internet fraud related.

According to the Utah Department of Commerce, in 2009, 27 percent of all consumer complaints received were Internet fraud related and included failure to deliver the goods, failure to honor a warranty; and using false or misleading statements, such as "free" when hidden costs were involved. [CLICK HERE for a safe online shopping tips]

Shoppers encouraged to buy local

Mayor Peter Corroon and Mayor Ralph Becker spoke at a store about the importance of shopping at Utah's unique shops. They said that shopping locally will help small businesses and keep three times more money in Utah.

Becker said, "As part of your shopping, we know you're going to go online, we know you're going to go the larger stores, but what really makes our community, the pleasure it is in terms of our business interactions is our local businesses."

Business owners pointed out that buying at Utah stores is the key to the state's economic development. The mayors signed a pledge to each spend 10 percent of their own holiday budgets at local businesses.


Story compiled with contributions from Richard Piatt , Marc Giauque and Cleon Wall.

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