As Back-To-School Shopping Begins, Consumers May Turn Frugal Most economists say this year's back-to-school sales will be slower than last summer's because consumers have been coping with more expensive gasoline and higher payroll taxes. Still, several states are offering tax-free shopping to encourage purchases.
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As Back-To-School Shopping Begins, Consumers May Turn Frugal

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As Back-To-School Shopping Begins, Consumers May Turn Frugal

As Back-To-School Shopping Begins, Consumers May Turn Frugal

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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As much as we don't want to admit that summer will be over soon, it is time to start thinking about back-to-school shopping. That's the second most important season of the year for retailers next to Christmas. And consumers - depending on where you live - you might be able to keep a little more in your wallet than you expected.

Some states are offering sales tax holidays - which can benefit both families and retailers. In Massachusetts yesterday, lawmakers approved a two-day tax holiday for later this month. Another state offering the benefit is Texas.

From member station KUHF in Houston, Andrew Schneider reports.

ANDREW SCHNEIDER, BYLINE: The front of Target's Houston Central location is bustling. There are plenty of mothers shopping with children in tow. A jumbled display area next to the cash registers stands crammed with notebooks and assorted paper goods. And hanging overhead, visible from one end of the store to the other, are dozens of giant pencil-shaped signs advertising back-to-school sales.

Patrick Lopez is the manager on duty.

PATRICK LOPEZ: You're going to see popular items such as like patterned backpacks. So we have some school-handy headphones, which have been ever popular. More technology-based items, such as the USB sticks for the computers that students may need this year as compared to previous years.

SCHNEIDER: Lopez says he expects sales to pick up the weekend of August 9. That's when Texas's sales tax holiday kicks in. For three days, shoppers don't have to pay sales tax on clothes, shoes and many school supplies - as long as they cost less than $100 each.

In Houston, the combined state and local sales tax comes to eight and a quarter percent. A break on that tax can make a big difference for low-income families. Of course it's helpful to retailers as well.

ED WULFE: The back-to-school holiday is probably second only to Black Friday, which occurs after Thanksgiving and kicks off the holiday season.

SCHNEIDER: That's Ed Wulfe. He's a real estate developer who specializes in Houston retail stores. He knows how much storeowners need strong customer traffic to keep registers ringing up sales.

Texas is one of 18 states offering late-summer tax breaks to attract more shoppers. Retailers estimate that this year households will spend about six to seven hundred dollars apiece on back-to-school merchandise.

But if store owners are counting on tax reductions to help boost overall sales, some economists say they may be disappointed.

Steven Craig teaches public sector economics at the University of Houston.

STEVEN CRAIG: You know, the question is: Does the sales tax holiday stimulate total sales, or does it just move sales from a couple of weeks, one side or the other?

SCHNEIDER: Then there's the question of what counts as a back-to-school item. In Texas, the tax break covers items like backpacks, but not more expensive goods like computers.

CRAIG: You're really distorting your tax system. The whole purpose of the tax system is to raise money for the government but to have as small impact on the economy as possible. Is there any reason that we want to help retailers of clothing more than retailers of electronics, just for example? No.

SCHNEIDER: The retailers that tend to benefit the most from sales tax holidays are department and discount stores. Again, retail store developer Ed Wulfe.

WULFE: The stores have all kinds of promotions and sales. And if the customer traffic is in the stores, they're going to buy, and they're going to buy more than just the back-to-school merchandise.

SCHNEIDER: Of course not every customer can be drawn in by tax breaks and back-to-school sales. Busy parents sometimes have to decide between saving money and saving time.

Jessica Vasquez was hitting the Houston Central Target store this week. She was shopping with her sons, ages five and seven, and a niece, age 10. She's trying to keep her cool before the shopping rush heats up in coming weeks.

JESSICA VASQUEZ: I don't like the hustle and bustle. I like to get my shopping done ahead of time.

SCHNEIDER: For retailers, the key will be to get her to spend money now, and then somehow persuade her to come back for another round of shopping later this month.

LOPEZ: For NPR News, I'm Andrew Schneider in Houston.

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