We’re not sure if Supreme Court Justices whip out their mobile phones at Best Buy to check online reviews when shopping for a new dishwasher, or if they browse in bookstores but purchase their books online. Whatever their shopping habits, they’re being asked to consider the practices of webrooming and showrooming in a case with major significance to online sellers.
The Supreme Court will hear South Dakota v. Wayfair on April 17 in a case that could overturn Quill vs. North Dakota and allow tax agencies to force merchants with no physical presence in their states to calculate, collect, and remit sales tax on transactions made to their residents.
In a brief filed in November urging the Court to hear the case, the American Booksellers Association (ABA) said the Justices should overrule Quill and cited the practice of showrooming:
“Quill is deeply harmful to bricks-and-mortar retail stores. Quill has yielded the notorious practice of “showrooming,” where a customer browses in a bricks-and-mortar store, and then buys products online using a smartphone in order to avoid paying sales tax. That practice causes profound harm to independent bookstores, which have low profit margins in the best of times and cannot compete on price with online retailers that take advantage of Quill’s artificial competitive imbalance.”
The ABA also said, “Quill results in an artificial imbalance that creates a powerful incentive for customers to buy books online rather than from their local bookstore, and as such, causes significant competitive harm to its member bookstores.”
In December, Wayfair and its co-respondents Overstock.com and Newegg urged the Court not to grant cert (a month later, the Court agreed to hear the case). In the brief, they said studies proved that instances of showrooming were dwarfed by the opposite phenomenon, called webrooming, “in which consumers use a website to research a product (including detailed specifications and customer reviews) and then go to a local store to purchase it.”
While it’s fun to think of the “Supremes” learning the ins and outs of ecommerce, showrooming and webrooming are going to continue even if Quill is overturned. The question the High Court will consider is this: “Should this Court abrogate Quill’s sales-tax-only, physical-presence requirement?”