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  1. #1
    Moderator MichaelColey's Avatar
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    Overstock to reward customers in states where it cut off affiliates
    Talk about rubbing the states' noses in it...

    As part of tax fight, Overstock to reward customers in states where it cut off affiliates

    The promotion applies to online shoppers in the states of Illinois, New York, North Carolina and Rhode Island. Each state has enacted laws that require Internet retailers to collect state taxes if they work with in-state affiliates, which are web site operators that provide links to products sold by web merchants and then receive commissions on those sales. State officials say affiliates constitute an online retailerís physical presence in a state, satisfying a legal requirement that lets the state require online retailers to collect the taxes. Overstock calls such laws unconstitutional and, along with Amazon.com, has cut ties with affiliates in states that have enacted the tax laws.
    They're giving a free Club O membership (normally $20) and $10 to consumers in those states who spent $300 with Overstock last year.

    The article also points out that a similar law in Arkansas is just awaiting the governor's signature and that California is considering a similar law.
    Michael Coley
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  2. #2
    Beachy Bill's Avatar
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    Rubbing the states' noses in it. But what about the affiliates' noses? Almost like Overstock saying, "We didn't need those affiliates anyway."

    Just sayin...
    Bill / Marketing Blog @ 12PM - Current project: Resurrecting my "baby" at South Baltimore..
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  3. #3
    Moderator MichaelColey's Avatar
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    We (affiliates) are the collateral damage. Overstock and Amazon are taking these actions against the states, not against affiliates.

    While it's painful for those affiliates who are affected, it has given tremendous ammunition in fighting the battle in other states. We can show these as examples to states considering similar legislation that not only will they not collect the sales tax they hoped to collect, but they'll also cause great harm to those affiliates who live in their state.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

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  5. #4
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    I don't understand this at all.

    Overstock is essentially telling states that if they enact this law, Overstock will compensate consumers in the state for the equivalent of the "affiliate percentage" for ALL SALES in the state -- not just for the revenue lost by in-state publishers (affiliates)!

    Overstock is now paying an incentive for other states to enact these laws!

    I assume that the goal here is to annoy legislators by encouraging their states' residents to buy even more often from Overstock, so the new laws' impact will be reduced sales-tax collections in these states. But I don't think that's really the message that will get through -- the same legislators will likely boast how they brought millions of dollars of discounts and rebates to their state's consumers.
    Last edited by markwelch; April 4th, 2011 at 11:27 PM.

  6. #5
    ABW Ambassador JudiMoore's Avatar
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    I listened to the Texas Finance committee today during the discussion of SB1798. Several people I knew and several that I don't know were there to testify against. There were also many merchants weighing in on the "for" side.

    The part that disturbed me came in the initial explanation of what the bill was about. The speaker explained about leveling the playing field, about the Supreme Court ruling in Quill vs ND and what created nexus, etc. Nothing too different from what has been said before. But he went on to say that affiliates have raised concerns about being cut off from their income and that they have pointed to other states who recently enacted the law. And he said (and I can't quote exactly) that these affiliates can run from state to state but they can't avoid paying forever. I don't know if he meant to say merchant or if there really is that much of a misinterpretation of what's happening.

  7. #6
    ABW Ambassador 2busy's Avatar
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    I'm pretty sure that those merchants weighing in on the wrong side aren't about to set anyone straight. There may well be distortions or at least no effort to correct the misconceptions about affiliates "running".

  8. #7
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    I like this deal. the wal-marts, barnes and nobles, targets, etc have been saying terminated affiliates can work with their program....

    overstock is pretty much saying states that pass these laws, its willing to work with its citzens to give them incentive to shop at their website.

    I hope Amazon follows suit. the states need to get the message that they are going to lose in more ways then one when they pass affiliate tax laws.

  9. #8
    Defender of Truth, Justice and the Affiliate Way
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    Almost like Overstock saying, "We didn't need those affiliates anyway."
    That is what Overstock is saying, but not to rub affiliates noses in it. OS has sent letters to legislators when legislation was pending letting them know that trying form a nexus based on an advertising channel isn't going to hurt OS because they have many other means to advertise within the state. It's only going to hurt the affiliates (the advertising channel being targeted). OS can remove the affiliates and still make sales in the states. My guess is OS is doing a flagrant to bring that point home. Whether or not any legislators will grasp that point is another matter.

    The merchants that are really snubbing affiliates are the big box merchants who are currently behind the current push for affiliate nexus laws, like WalMart, Sears, etc. They are pushing for the laws knowing EXACTLY what the impact will be to affiliates. Then to add insult to injury, they are blatantly try to recruit affiliates who have been terminated into their own programs. IMO, it's despicable and low-down behavior towards affiliates from those big box merchants.

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