The 5% Solution

So, this weekend (August 12-13) is the annual Tax Free Holiday in MA. It’s something done in many States throughout the union that regularly charge sales tax on most non-essential (food, clothing) retail items. For one weekend a year, you can buy any item up to $2,500 (with some exclusions http://www.dor.state.ma.us/rul_reg/tir/TIR_06_13.htm) tax-free. In the great State of Massachusetts that means a savings of an additional 5%! Wow. This is the 4th year I believe and it’s been an unbelievable success for retailers throughout the State. People plan purchases around this weekend for weeks in advance, I mean, it is an additional 5% off. Who wouldn’t want to save 5%?

OK, you’ve probably figured this is going somewhere as obviously the level of cynicism above was far below my normal level. I’m mystified by the popularity of this event. I mean, I’m in retail, and have been my whole adult life. People are so fascinated with numbers and huge savings it’s not even funny. If you run a sale, it has to be “x%” off everything or people think they’re getting ripped off. People fall for those jack up your price and then give 20% off gimmicks all the time. People are just plain fascinated with “huge savings”. To a person, if we have a sale, they ALL ask what percent off it is. Not dollars saved but percent off. Even if you’re regular price is the lowest in the world, if it’s not 20% lower when on sale, you’re a rip-off. That said, people go crazy making big purchases to save the 5% sales tax. If we had a sale and said 5% off everything in the store, people would laugh their asses off at us. In fact, if we had double the sales tax off, 10% off all purchases, people would still laugh. Yet, come this Saturday, they will be in lining up to make major purchases. What a Country!

So, why the phenomenon? Why go out of your way to save 5%? Most places aren’t offering any savings on top of that? So why does 5% savings get people off their asses? Simple. Because it’s 5% they are taking from the State, not the store. It’s a chance to “stick it to the man”. People love that. If give liberals, conservatives, Democrats, Republicans, old, young, rich, poor and everyone in between a chance to say “bite me State of Massachusetts, you ain’t getting my 5%”!! It’s kinda like the 60’s and 70’s protests against except conformity…except in a really lame way. The whole thing is a giant ploy by the State to keep dollars in MA and out of tax-fee NH. They are convincing you that while you pay sales tax 363 days a year and your neighboring State doesn’t, for one weekend a year, you’re on equal ground.

So, lets get out there and buy people, get those refrigerators, air conditioners, and ice skates (please). Help pay my salary while giving the finger to the State. Making it Massachusetts means Keeping it in Massachusetts!! Man, PT Barnum was right. There is a sucker born…