One of the most prevalent questions we get in our inbox these days is “should I buy online?”. With the economy in the shape that it’s in, many people are looking to shave a few bucks wherever they can. Buying appliances online can seem to be an easy way to save big bucks on a large purchase.
No Sales Tax
Buying online can indeed save you sales tax on your purchase. States can’t force out-of-state businesses to collect their sales tax for them. Which is why you can buy from Big Bill’s Appliance Emporium in Colorado while you’re at home on your couch in Florida, and pay zero sales tax on your purchase. After all, in many states sales tax is above 8%. This often means hundreds, if not over a thousand dollars in savings.
Don’t kid yourself though. It is still, technically, against the law. In all states that collect sales tax, the buyer is totally liable for the state sales tax on any item they purchase for use in that state. Big box online retailers use the promise of no sales tax in their ads all day long. And while the internet sales tax issue hasn’t been “officially” addressed by the federal or state government’s – the states, with their newfound debt burdens, are starting to take matters into their own hands.
In many states, information gleaned from the paperwork submitted at freight weighing stations is now being used to target individuals for large tax liabilities. Sure, your state government doesn’t have time to worry about a $100 Amazon.com purchase – but they will take a few extra minutes to look over your $10,000 appliance package.
Case in point: About a year or so ago, my friend bought an oriental rug on the Bloomingdales website. He paid sales tax on the item, as Bloomingdales always charges sales tax, and it was shipped from their New York warehouse by an LTL carrier. About a two months later, the State of Florida Department of Revenue sent him a not-so-kindly worded letter, informing him of the item he had shipped and the date it passed into Florida. They required him to either a.) send proof that he paid sales tax on the item or b.) send a copy of the invoice so that they could calculate the sales tax due for him.
This sort of tactic is becoming widespread across the U.S. and is only sure to get worse. Tracking purchases from Fedex and UPS is too great a task for state governments currently. But freight shipments are much easier to keep track of, with much higher tax values.
Almost every big box appliance dealer online promises free shipping on their orders. However, for most, their “Free Shipping” is what we call “Curbside” shipping. On the website, this sounds quaint. But the reality can be brutal. This is the type of shipping you would get if you had a warehouse with a unloading dock and a forklift. They open the truck, push your appliances out into your driveway, and move on to the next stop. And if you think a couple of twenties is going to get them to haul your entire appliance package into your house and uncrate them – think again. These boys have lots of stops to make.
That’s where the “White Glove” delivery option comes in. This is where buying online starts to lose its advantage. Where most local appliance stores deliver, uncrate, and remove boxes for free – you’ve now got to pay an extra $120+ to have the same service performed for you.
Prices that Can’t Be Beat
Buying appliances online, in most cases, will only save you money on sales tax. People automatically assume that online stores will have prices that just can’t be matched or beat by a local dealer. For small ticket items online – like small electronics, books, and cd’s – this may be true. But for big ticket items like home appliances, it’s simply not the case.
If you find a good price online and you take it to a local dealer, they are certainly going to find a way to match the price. At the end of the day, a sale is a sale and these days most dealers aren’t turning anything down.
The Real Risks
Many online dealers show prices that are not just low – but crazy low. All dealers have access to manufacturer’s “reconditioned” units. These are units that have been returned for one reason or another and have been deemed fit for sale and repackaged. They are sold with new warranty’s but at a discount. Often times, the model numbers of these units only differ by one digit. One would need a keen eye to detect if an online retailer was using one of these units to lure them into a buying online. Sometimes dealers run specials on units that are scratched and dented, but make it difficult to notice the disclaimer right away. If a deal is too good to be true, it usually is.
But the real risk of buying online lies in the catch-22 of freight shipping. No freight carrier will let you uncrate a package until it is signed for. This is simply the nature of the business. That means that the only chance you have to refuse the unit is if you see some kind of damage on the exterior of the box. If later open the box and see that the unit was used or damaged before boxing, you’re out of luck.
The chance that the dealer is going to pay for the shipping cost to send the unit back for a return is next to zero. This is where shopping online turns from a money-saving convenience to a nightmare.
“But I paid with a credit card. I can just dispute it, right?”
It’s not that simple.
If you sign for the delivery, that’s all the proof they need to get the credit card company to reject your dispute. You have no way to prove the unit was used or damaged before it arrived to you, and the manufacturer does have proof that you agreed to their terms when purchasing the appliances and you signed for the delivery of the unit. I have yet to hear of a single person who has signed for the delivery of a damaged appliances from a dealer across state lines and then has been able to get the credit card company to approve the dispute. Therein lies the catch-22. You can’t see the product before signing for it, but you can’t win a dispute on the product unless you refuse the package before signing for it.
Warranties are not always honored from region to region either. Usually, the chain of sale goes like this: appliance manufacturers sell to distributors, which are basically regional sales centers which sell to the local dealers and big box stores within their predetermined region. In many cases, the onus is on them to provide the customer service and repairs on the products. This means that each distributor is given an allowance by the manufacturer to handle the customer service issues in their area; such as repairs, defective buy backs, etc. This means that if you purchase an appliance from outside their region – and they will know right away by the serial number – they will not service it for you or provide you with any customer service. The way they see it – you didn’t buy the unit from them. Why would they spend their precious CS cash allotment on you?
It Pays to Go Local
In our opinion, online purchase risks outweigh any potential monetary savings on almost all major appliance purchases. To us – it’s just not worth it the gamble when you’re spending thousands (sometimes tens of thousands) of dollars.
In our experience, the perks of buying from a local dealer far outweigh any sales tax amount you would end up having to pay. For one, when they deliver your unit you can demand to inspect it before signing for it. The opportunity to catch any damage or defect before they leave is invaluable. Then, if by chance something doesn’t work properly after the unit is installed, you have a local company to call and converse with about the issue before you ever have to go to the distributor or manufacturer.
Another perk of buying local is when something should go wrong when working with the product manufacturer over an issue. Let’s say for some reason the manufacturer isn’t taking care of an issue that is clearly theirs to fix. Your dealer has more leverage than you do, and in many cases will be happy to step in by calling their manufacturer rep to shake up the situation. This, also, can prove invaluable in a time of need. Let’s face it: some appliances break down. Having a good relationship with your local dealer can make all the difference when that happens.