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As local retailers take a beating from online sales, the rest of us get bruised, too

In 2013, Amazon, the world's biggest online retailer, took in $75 billion in revenue, a figure greater than the CIA estimates the entire GDP of Cuba to be. That's obviously a lot of stuffed virtual shopping carts — and thus, a lot of empty physical ones.

"It's been the last one to two years where people come in with a computer, go to a bar code, find out where they can find the cheapest thing in the country, and walk out," says John Crandall, owner of downtown's Old Town Bike Shop.

This trend, known as "showrooming," has frustrated brick-and-mortar stores since the proliferation of smartphones. Amazon and Google have created apps specifically for price-checking the entire Internet with the scan of a bar code.

If Crandall sees his non-customers again, it's only when they return with a new part or entire bike and ask Old Town to assemble it.

"Sometimes you become really angry because of the lack of respect," Crandall says. He notes that Old Town only charges its normal assembly fee for that service; without selling bikes and accessories themselves, he's not covering his overhead and paying his 11 employees.

Crandall's far from alone in his frustration.

"I think there's something wrong with our system when the community doesn't support the community," says Blake Wilson, owner and partner of The Art Bank and Oriental Rug Gallery on North Tejon Street.

In recent years, local stores like Shewmaker's Camera Shop and Video Game Exchange have cited online competition among reasons for closure. While many stores have navigated the threat from mega-retailers like Walmart, online retailers like Amazon, eBay and countless others have created another reason for angst and apprehension.

So much for savings ...

As most people know, you don't have to pay state and local sales taxes on out-of-state online purchases. However, there is a "use tax," usually the same rate as the local sales tax, that you're legally obligated to report when you file your taxes in April.

It's just that no one does. According to the National Association of Counties, more than $23 billion went uncollected in online use taxes in 2012.

"There's no way for me to know if this person made an Internet purchase and if they're paying use tax or not," explains El Paso County sales and use tax manager Brian Olson. "It would cost us more money to find that out than we'd receive."

So you win, but the county loses. Uncollected use tax, Olson says, is enough to affect the city and county's ability to render services to its citizens. "It absolutely could. ... That's where the majority of our revenue comes from to pay for services to the citizens of El Paso County."

In November 2012, voters approved a .23-percent sales tax increase to fund needs within the county sheriff's office. "Maybe," posits Olson, "we wouldn't need that .23 percent if we had all that Internet sales tax collected."

Legislation in Congress, called the Marketplace Fairness Act, would require all companies to collect local taxes on all online sales. It and similar bills have languished in Congress for years. But a bipartisan group of senators last week concocted a new plan: attaching the bill to the renewal of The Internet Freedom Act, a much-loved piece of legislation that makes it illegal to tax Internet access.

Should the act pass, the state of Colorado has already drafted a bill that's ready to go to help Colorado retailers with online storefronts collect tax. The bill has sponsors on both sides of the aisle, but younger legislators are more likely to be in opposition — reportedly not a single Senate Republican under age 50 supports the measure.

Setting them apart

It's not that local businesses are waiting around for a white knight sent from Washington, D.C.

Vidja Games has been in business for nearly three years and — since Video Game Exchange shuttered earlier this year — is the only vintage game retailer in the Springs proper. Owner Matt Probst says his business is still growing; he's making new hires and installing more shelf space. He's also constantly adapting to the threat of digital storefronts.

"We just switched to this new pricing structure," he says, explaining, "There's a website that takes eBay prices, Amazon prices, GameStop prices ... combines them and gives us a price like, 'Hey, this is what it's been selling for,' and we work from there."

In his physical location on Austin Bluffs Parkway, he's created a mingle-friendly environment with games on demo to play, and assembled staffers who love talking games. He also hosts game tournaments in his store. "I think largely why people shop at our store is because of everything else that we do," he says, "not just the games."

Crandall has also nurtured a community vibe, since opening Old Town in 1976. He offers free checkups and fittings on bikes at his South Tejon Street location, but also ensures employees get out into the city. He sets up bike repair stands at community rides, bringing spare parts to keep his fellow riders, well, riding. He and his team also lobby for biker-friendly laws and new bike paths.

"I think the public in general needs to realize the impact on infrastructure of the place they live," he says. "We do have a large number of customers who do get this, and have been supportive. We're very lucky."

The Art Bank, meanwhile, has not just 35-plus years of history behind it, but also a team of experts who will ensure the art you're investing in is the genuine article.

"What we're finding," says Wilson, "is average consumers think they can go online after taking a photograph of an oriental rug or a painting or something. But there are wide varieties of quality. We feel it's important in one-of-a-kind works of art that the consumer see and touch and feel the product before they buy it."

Wilson, one of only around 50 certified rug appraisers in the entire country, says he's seen countless people try to save a few bucks on a rug or work of art by buying online, only to be delivered an inferior product.

"I wish I had a better zinger than 'Buyer beware,'" he jokes. "There are a lot of people out there willing to take your money and not deliver with honesty and integrity. Not be there to back you up when you have a problem down the road."

Why it matters

Mountain Chalet has been selling outdoor gear out of its North Tejon Street location for more than 40 years. Sales manager Matt Chmielarczyk says the store's been affected by online competition for at least the last decade, and he has his own "showrooming" stories.

"[Customers] come in and we spend an hour and a half fitting them into a pair of ski boots," he says. "And then they go online and buy them and save the money it might cost in tax."

Despite such episodes with some people, though, the store's commitment to the community overall hasn't wavered. Which gets to another compelling argument for shopping local.

"Even when things are down for us, the owner of this shop has always been generous with local trail organizations: Rocky Mountain Field Institute, Friends of the Peak, Cheyenne Cañon, Trails and Open Space Coalition, all of these different things," he says. "It's become sort of expected of this shop to be quite philanthropic. Despite the fact that, y'know, things aren't as prosperous as they once were for us."

Crandall also continues contributing to local nonprofits. But, he says, "As there are fewer small businesses ... there'll be much less community involvement. Nonprofits can't exist without for-profits."

Olson, the taxman, sees the intricacies of the financial equation perhaps better than many of us. Still, his argument is simple. "When I make a purchase, I'd rather this money stayed local," he says. "It's no different from 'Buy American.' Buy Local. It's the same effect."

And Probst puts it this way: "I want the best value when I'm shopping for something. That's not necessarily going to be what's cheapest."

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