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5 Ways Ecommerce Sellers Can Capitalize on Sales Tax Holidays

If you own an ecommerce business that ships to one of the 19 states with sales tax holidays, you have at least one opportunity each year to bring in a large amount of money. But competition for customer dollars can be fierce, with retailers finding increasingly more creative ways to win business.

Whether a state’s sales tax holiday falls just before students go back to school or in advance of severe weather, here are a few ways you can take advantage of sales tax holidays on your ecommerce site.

Remind Customers

Brick-and-mortar retailers are often surprised that customers don’t realize a sales tax holiday is in progress while shopping. Even those who do plan to take advantage of the savings may not realize that online sales are tax free, as well. Put effort into marketing directly to customers in states with tax-free weekends coming up to remind them that purchases on your site are eligible for free sales tax on those dates.

Advertise Deals

Many ecommerce sites have extensive mailing lists, filled with customers who have opted in to receive information on special offers and discounts. With each holiday, issue a special discount good for those who live in that state and promote the items the customer won’t pay sales tax on. Big-box retailers often promote special deals both in their stores and on their sites, so smaller retailers can remain competitive by offering their own specials.

Donate Proceeds

Tax-free weekends generally precede two occasions: back to school and weather disasters like hurricanes and snowstorms. Both situations are ideal for charitable donations, giving ecommerce businesses the perfect opportunity to win customers. Consider donating a portion of the proceeds of all sales to a local school system or disaster relief organization. The contribution is tax deductible for your business, and you’ll show customers that your online-based business supports local communities.

Offer Free Shipping

During busy online shopping seasons, free shipping becomes more vital than ever. On a sales tax holiday, ecommerce retailers must compete with local shops, as well as the many other websites offering deals. Free shipping gives your business a way to win customers away from the competition. Like many online retailers, you’ll likely find that shopping cart abandonment rates are high during peak shopping periods if you charge for delivery, with customers leaving your site once they see free shipping isn’t an option.

Focus on Customer Experience

A special weekend provides the perfect opportunity to show off your great focus on customer service. However, if purchases are made primarily through your website, it can be difficult to personalize the experience. Make an extra effort to reach out to customers who make purchases during the sales tax holiday, sending thank-you emails and providing top-quality service if they contact customer representatives. In the weeks that follow, make sure any returns progress smoothly to increase the chances shoppers will return for future purchases.

For online retailers that sell clothing or weather-related gear, sales tax holidays can be the perfect way to win new customers. By offering special deals in addition to the tax discount, businesses can win over new shoppers and turn them into loyal customers.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Stephanie Faris
Avalara Author Stephanie Faris