The height of summer brings all kinds of changes that are pertinent to your marketing, and one of those that can be fairly influential on your bottom line is the annual sales tax holidays held in various states. Many take place in August as a break for parents who need to spend significant funds on preparing their kids to go back to school, while others focus on hurricane or other disaster preparedness. Some states also include Energy Star tax breaks for helping citizens transition to greener options that are energy- or water-efficient. If you operate in a participating state, there are some tax-free holiday marketing tips you should keep in mind.
- New Mexico
- South Carolina
Please note: This list may vary from year to year based on changes in legislation, and each state may run their holidays on different weekends or weeks during the year. See your state’s department of revenue or taxation for complete details about participation, dates and eligible items.
Check out our tips below to help plan your marketing for the tax-free holiday in your state.
Do: Have a Sale and Offer Coupons
Consumers are already going to save a good bit of money during a tax holiday, but you still need a way to differentiate yourself from the competition. By adding extra incentives to shop with you, you can capture their attention in the midst of all the noise. You can do this by adding extra deals on top of the sales tax break, available only during the weekend. You could also offer coupons that are only good for the weekend, especially if you limit the distribution of those coupons to customers who receive your newsletter, are a part of your loyalty program, or who are frequent and loyal shoppers.
Don’t: Be Vague About Terms & Conditions
The worst thing that you could do is be unclear about how your sale works or the ways a coupon can be redeemed. The results will fall in two ways: Either you put your foot down with the customer and leave them disgruntled (leading to bad customer reviews, etc.) or you permit the over-redemption of coupons and discounts (leading to the offers hurting your business rather than helping it). Similarly, you want to have controls in place that prevent coupons from being abused or over-distributed; for example, the data in a GS1 databar can help individually identify coupons and track when they’ve been redeemed.
Do: Prepare Marketing in Advance—As in Right Now
For one thing, you want to begin promoting early, especially if your business offers items for back-to-school. The research and decision process for customers, especially for that particular shopping holiday, are stretching to earlier and earlier days on the calendar. If you’re not ready ASAP, by the time your marketing is in place, it could already be too late. Furthermore, depending on the state your business operates in, you may already be running out of time. While most of the pertinent sale tax holidays occur in August, some actually occur at the end of July.
You also need to ensure that your website and possibly your social media pages reflect the upcoming offers and whether or not the hours your store is open will change. You may think this is only important for stores that have a focus on ecommerce, but the truth is consumers are going to turn to their phones to search for answers about where they can find deals and when. If your site doesn’t have that information readily available, you may end up missing out on vital customers.
Do: Offer Extended Hours or Similar Promotions
We hope the reasoning here is obvious, but if it’s not, let’s take real sentiment in response to Florida cutting back the dates for its tax holiday. For many of the years prior, the Back-to-School tax holiday only ran for three days, however, in 2015, the state ran the holiday for 10 days. The state shortened it back to the original three days for 2016, but consumers don’t feel great about it. Per one parent in the article who will need to shop for two young children, “Can you imagine the crowds in those limited days? That’s going to be very inconvenient.”
Your business can’t change the days of the tax holiday, but you can go out of your way to make it as convenient and appealing to your customers as possible. Extra hours are one way to do that. Potentially extending your extra offers to the days before or after the holiday is another. Earn bonus points with loyal customers by offering them exclusive early access to sales or offer special hours just for them.
Don’t: Fail to Prepare for Crowds or Hire More Staff
You need to be ready for a tax holiday the same way you would be for any other retail holiday. Expect to have a higher volume of customers, so even if you don’t extend your hours, you’re going to need more employees on hand to ensure that they can all get help when they need it, find exactly what they need, and check out quickly. That means you’ll also need employees to ensure the store stays in good order and stock is replenished on the shelves. Employees also need to understand each of your offers over the weekend so if customers ask, they can explain things clearly.
Do: Group Items that Are Tax-Free for Your State
This, again, is pretty basic, so you need to ensure it happens. Whether you’re talking about products online, in-store, or featured in promotional materials (e.g., if your store offers circulars), then the products that are affected by the sales tax holiday need to be grouped together. For one thing, it makes them easier for your customers to find. Another reason is that it makes it much clearer which items are not going to be tax free. If you’re running another sale in conjunction with the tax free offers, it still needs to be clear which items are tax free.
We recommend putting the tax-free items in the front of your store. Ensure there’s plenty of signage to point the way so customers can access them quickly and easily. Non-tax-exempt items that are on sale can be adjacent but must be clearly differentiated by additional signage.
These tax-free holiday marketing tips are just a starting point. Always remember that there’s never a one-size-fits-all approach to marketing. Understand what works best for your business and your customers.
Prepare Your Business for Tax-Free Weekend
You can use these tips to formulate a strategy about how to plan your marketing for the tax-free holiday.
- Remember that it’s important to prepare sooner rather than later. This will not only mean you’re ready to roll out your marketing at the most effective time, but allows you to build risk management into your strategy so you can adjust your plans if needed.
- Some states run their tax holidays earlier than you’d expect. Both Georgia and Mississippi, for example, have tax holidays at the end of July!
- Some states condense the Back-to-School, Energy Star and disaster preparedness tax holidays together. Virginia, for example, has all three types of tax holidays combined to run over a single weekend.
- Other states separate them, but their dates aren’t all that far apart, and you’ll need to prepare for the second even while you’re still running deals for the first tax holiday. For instance, Georgia’s Back-to-School tax holiday runs at the end of July, while its disaster-preparedness holiday runs on the last weekend of September.
- These tips should be used in conjunction with the data you have about your customers. If you don’t see a lot of Back-to-School shoppers, you can gear your marketing most toward the disaster preparedness concerns or green tech.
- Contact Valpak for help with creative, affordable ways to promote the tax-free holiday in your store.