Shopping at Target.com

I haven’t been to Target.com in a while, but decided to revisit. Target clearly doesn’t lack the brand recognition or marketing muscle to make this site great, but it seems like it has some shortcomings compared to online competitors. For example, I looked at Kitchen Gadgets. The #5 best selling kitchen gadget on their site today was a 1-quart measuring cup:

1-quart measuring cup from Anchor Hocking

This product is a best seller, yet has only five reviews. Two of the five reviews were 1-star, stating that the markers wash off in the first use. Another one said it takes two years for the markers to wear off. And two people loved it. A measuring cup without markers isn’t particularly useful, eh? With only 5 reviews, it’s hard to say whether the experiences of 60% of reviewers are the norm. An online competitor to target.com, Amazon.com, offers a comparable product from Pyrex that has an average of 4.5 stars and 387 reviews. Personally, I would have more confidence in purchasing the Pyrex product based on reviews alone. Yes, it’s $4 more expensive, but measuring cups last forever (unless the markers wear off).

But, when ordering stuff online, the cost isn’t just the cost but the cost plus tax and shipping. Inconveniently, Target.com doesn’t offer a fully loaded cost on their property description pages, or hint at what shipping may be, or how one may be able to avoid shipping costs. Instead, I had to start the checkout process to figure out what it would cost to purchase this item:

Target.com Checkout

Notice on the right where it says:

Shipping: not yet calculated
Tax: not yet calculated

As in, we demand that you tell us who you are, where you live, and your email address before we’ll tell you what it would cost to purchase something from us.

I complied, assuming that once Target.com knew my address they’d be able to calculate relevant taxes and shipping. But, I was wrong:

Target Checkout

Here I am at the checkout screen and Target still hasn’t told me what I’ll be charged to purchase this item. They did accurately calculate the 7.775% sales tax rate I’d need to pay to subsidize the Vikings stadium, but didn’t tell me what it would cost to ship the product to my door.

I chose PayPal for checkout because I figured PayPal would probably give me an option to see the full price before Target charged me their mystery figure. Here’s what I found out:

PayPal Checkout

The mystery shipping cost for the $5.54 item: $6.72. That hurts.

What’s even more strange about this is the sale taxes more than doubled from 7.775% to 17.148%. That makes no sense to me. Anyone know what that’s all about?

Between best seller products on a major retail site having only 5 reviews, 60% of reviews of a best seller product being negative, no transparency on shipping or tax before checkout, and jumping sales tax prices, it’s tough to have much confidence in the site.

Now, compare that to Amazon. Here’s Amazon’s most popular 1-quart glass measuring cup:

1-quart measuring cup

It’s $3.95 more expensive than Target’s best selling 1-quart glass measuring cup. But:

It has 22 images while Target offers one. Perhaps Target’s customers could benefit from a few pictures of measuring cups with missing lines so they could make more informed decisions?

Amazon’s 1-quart measuring cup has been reviewed 387 times with an average review of 4.5 stars:

Screen Shot 2013-04-08 at 8.36.14 PM

Target’s reviews appear to be sorted by date, while Amazon’s are sorted by usefulness based on up/down votes from other Amazon users. The top review of this 1-quart measuring cup has received 154/162 useful votes. It’s more than 500 words long. In a nutshell, it says that it’s a nice measuring cup but not as nice as they used to be.

Amazon makes it clear that you can get this shipped for free if you’re willing to spend at least $25:

Free Shipping on $25 Orders

They also show that a 3rd party seller is willing to sell this product for $10.95 with free shipping.

Amazon Free Shipping Upsell

Amazon also makes their upsell to Amazon Prime membership ($79 annual fee for free 2-day shipping on most purchases, plus unlimited movie streaming and other stuff) impossible to miss.

I skipped the Prime membership (I’m a Prime member, but I logged out for this demonstration) and took a look at my shopping cart. It turns out that Amazon lets me calculate the shipping/total cost for purchasing this item before I tell Amazon who I am:

Price from Amazon with Shipping

A rational person wouldn’t spend $15.98 or $13.21 with shipping on a measuring cup. Especially when Amazon makes it blatantly clear that you’ll get nearly half off on the next $15 worth of stuff you add to the cart to round up to $25 and avoid shipping.

Target does offer free shipping to certain customers, and a 5% discount. All you have to do is ding your credit applying for their credit card, which carried a 22.9% APR:

Target RedCard Fees

Amazon also offers a credit card with a lower APR, and points for purchases not only at Amazon, but for anything purchased with the card including bonus points for certain popular categories like gas stations, restaurants, and drug stores.

And, if we’re comparing shipping based on membership, Target’s RedCard users are eligible for free Standard Shipping (3-5 days) while Amazon Prime members ($79 annual fee) receive free 2 day shipping. If I order something on a Tuesday night and it may not show up until the following Monday, it may be free but it’s not exactly awesome compared to having it before the weekend for free.

So, it looks like Target’s a bit behind on reviews, reviews of reviews, transparency on shipping, calculating sales tax, free shipping offers, delivery speed for free shipping offers, and benefits offered to members.

Personally, I think shipping policies can make or break online retailers. If e-commerce sites can’t satisfy the:

– I need something for a birthday party this weekend
– I plan to cook something this weekend
– I’m running low on diapers
– Christmas is almost here

crowds with cost-effective, reliable shipping, there are companies that do it on a daily basis and are winning a lot of loyalty through shipping that traditional marketing can’t touch.

8 thoughts on “Shopping at Target.com”

  1. I believe tax was applied against your shipping & handling as well…not that THAT makes any sense, either, but 7.75% of $12.26 is just a shade over 95¢ so the math works out.

    Gov. Dayton is crazy and wants Amazon to charge sales tax to “level the playing field.” (On the other hand, I’M crazy and think the playing field might be better leveled by repealing the sales tax altogether.)

  2. @CRZ, thanks for the insight. Looks like that’s right (PDF):

    How to compute Minnesota state and local sales taxes Minnesota sales tax and any applicable local sales tax must be charged on the retail price of taxable items sold in Minnesota. Taxable price. Sales tax is due on the actual retail price including shipping and handling charges. This is the total amount (including money and the value of any credits) paid by the purchaser.

    Would this mean that I can save on sales taxes by spending more in cases where spending more qualifies me for free shipping?

    My intent with this post was to show that the field isn’t level for quite a few reasons other than sales tax collection differences.

    @Reuben, mail order (and internet based) companies aren’t required to collect sales taxes. One argument for this is that it’s could create ridiculously high administrative costs for small businesses who’d have to collect and distribute taxes to hundreds of sales tax districts (state, county, city, metro, etc.). But, states are trying to fight back against this by proposing that taxes only need to be collected in states where a business does a significant amount of business such as $1m/yr in sales.

  3. Because Target has brick and mortar in MN, thee are required to collect sales taxes. Amazon is has an serious advantage in this regard and the playing field should be leveled. We (MN) lost a significant amount of local revenue due to online tax advantages.

  4. Screw Target.

    I don’t care if their HQ is in Mpls, they’re just a glorified grocery store and any bad thing you can say about Walmart you can say about Target. Well, almost anything. Walmart didn’t demand massive subsidies for a downtown Mpls HQ and Walmart didn’t demand massive taxpayer subsidies for three Mpls stadiums that will serve as Target billboards so shoppers can be reminded where they should buy junk food and cheap plastic shit from China.

  5. “Walmart didn’t demand massive subsidies for a downtown Mpls HQ” === If they indeed did demand “massive subsides” that were out of line, someone in authority could have said No. As for naming rights, I’m relatively certain other companies must have considered making a run at it. Land ‘o Lakes Field or Wheaties Field would have had a pleasant ring to it. And what do you have against grocery stores?

  6. Nothing against grocery stores, just tired of the Target boosters in this region – namely the Strib and the City of Minneapolis; for them Target can do no wrong and is worthy of endless subsidies.

    Here’s the irony: Much of Target’s growth of late is from squeezing more groceries into the same space and ringing them up with non-union labor. That hurts Cub, Roundys, Lunds, et. al. and their unionized employees. So we have the spectacle of liberal Mpls politicians (redundant, I know) pandering to unions to get elected, and then showering union-killers with millions in taxpayer subsidies.

    Finally, to tie this in with Ed’s article/thesis about drive time and right wing radio, you can thank firms like Target for that, too because virtually all of the big boxes are in the suburbs.

Leave a Reply

Your email address will not be published. Required fields are marked *