Standing in line at the local Wally World today, waiting to pay for a minor purchase. I see the now common wall of gift cards next to all the gum and candy in the check out lane display. OK, gift cards are big business during the Holiday Season, and many people make use of them.
Something catches my eye. American Express Gift cards, in $100.00 denomination. Must be a hundred of them on the pegs. Well, that might be a bit pricey for your average Walmart shopper, but whatever. Huh, what's that? A price tag of $105.84? ???????
Yes, this $100.00 Gift Card will cost you $105.84.
Puzzled (and a little bored, I admit), I ask the clerk to scan it for me. Sure enough, it comes up as $105.84. Not only that, but it triggers sales taxes as well. If I want to get one of these cards for someone I know, it will cost me $114.57.
Normally gift card sales involve the entity the card is named for (a store, a service, etc.) paying the retailer who sells the card a percentage of the card's amount as compensation. Either American Express is not doing this, and Walmart has decided they need $5.84 in profit to sell the card, or Walmart is double-dipping their profit margin. In either case, the consumer gets screwed.
Charging sales tax is just plain theft from the consumer. This may be an error in the checkout system software, which means that Walmart will keep all the 'sales tax' revenue collected by mistake. Or, if this is indeed a tax code edict, then the city/county/state/federal governments who receive their shares of that sales tax are double-dipping ... since the goods/services that will be purchased with the gift card by its recipient will also be subjected to sales taxes. In either case, the consumer gets screwed.
Be careful when you buy gift cards, folks ... so that you don't get ripped off.
(This sounds a lot like something Obama would do, doesn't it?)