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Retail groups lash out after Amazon announces Price Check app promotion

December 7, 2011 | 12:32 pm

Smartphone price check

Well, that didn't take long.

A day after Amazon announced that it would give shoppers up to $15 for using its Price Check app in a bricks-and-mortar store and buying that item from Amazon afterward, prominent retail groups are lashing out at the e-commerce giant. 

The Retail Industry Leaders Assn. said the app unfairly uses bricks-and-mortar stores as "showrooms to then purchase merchandise online from inside the store." 

"Central to this tactic is Amazon's continued practice of using a pre-Internet loophole to avoid state sales tax collection, a move that gives them an unfair competitive advantage over Main Street retailers," the group said.

Danny Diaz, a spokesman for the Alliance for Main Street Fairness, echoed that sentiment, saying "no retailer can compete with the special treatment" Amazon has by not collecting sales taxes.

"This app is simply another ploy by Amazon to exploit the loophole that allows them to evade collecting state sales taxes," he said.

In September, after several weeks of bickering with California lawmakers and traditional retailers, Amazon agreed to begin collecting sales taxes in the state in September 2012. A new law that went into effect July 1 required online retailers to begin collecting the tax immediately, but Amazon refused to follow through, leading to the two sides cutting the September deal. 

On Wednesday Katherine Lugar, executive vice president of public affairs for the retail leaders group, said Amazon's Price Check app promotion was worsening an already unfair advantage during the all-important holiday shopping season.

"Amazon's aggressive promotion of its Price Check App shows the lengths they are willing to go to exploit this tax loophole, and is a stark reminder of why Congress needs to act to protect retailers on Main Street," Lugar said.

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-- Andrea Chang

Photo: A shopper uses his smartphone to check prices at a Toys R Us in New York in November. Credit: Seth Wenig / Associated Press

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