Comments about Overstock.com and Sales Tax

Overstock.com, a place on the Internet where I have found some excellent electronics deals, has decided to cut it's advertising ties with states that charge sales tax with Internet sales.  It calls the practice of charging sales tax on internet ads in those states unconstitutional.  If you live in those states, you can still use Overstock.com to purchase goods, but there will not longer be advertising in those areas.

I know that sales companies make such decisions all of the time.  It is one thing for a company to support and endorse political candidates.  It is another when a company, like Overstock, makes a political statement like this.  It rarely happens.

Generally, the reason why a company does not become so overtly political is because they do not want to risk offending customers.  For example.  When working on a Master's degree, I focused on the grocery store industry.  Harmon's, an independent Utah chain with about a dozen stores in the state does not get involved in politics at all.  Croger, the parent company of Smith's, is highly involved in the Democratic party.  But in Utah, where the Democratic party is weak, their involvement is minimal.

It is risky for a company to get involved in politics at this level.  It costs the firm potential customers, even those that agree with the company in principal.  Which is what Overstock is doing.  It is intentionally reducing it's customer base, costing itself revenue and employee jobs, to make a point.  Many of the customers affected by the decision agree with the company and think that paying this type of sales tax is somehow wrong.  The employees that will lose their jobs as a result probably also agree with Overstock.

This is not the correct way to make a point.  Customers will find other online discount retailers.  So will suppliers.  So will investors.  So will employees.  The only ones that will be hurt by the decision is Overstock.com itself, their investors, their suppliers and their employees.  As a customer who believes with Overstock in principle, I believe that Overstock.com should rethink the methods they use to make a point.