Online Shopping: Helping or Hurting Local Economy?

By Maggie Vespa

November 29, 2010 Updated Nov 29, 2010 at 11:51 PM CDT

You didn't have to step outside your door Monday to know the holiday shopping season is upon us.

You just had to log onto your computer, but on this year's 'Cyber Monday,' some experts are asking you to think about the toll buying online may be taking on your local economy.

Kim Goodwin has been co-owner of Peoria's EmbroidMe for eight years.

In that eight years, she says many customers may have never set foot in their store.

"We have garmets online. A lot of people don't know we sell promotional products online. We have promotional products on there. You can buy almost everything we have online if you'd like," she said.

Goodwin says the store, located in the city's Metro Center, does up to 20% of its business over the internet, and they're not alone.

National experts say on this year's Cyber Monday, up to 106 million people are expected to log on and shop, something that has them worried.

In short, because there is rarely a sales-tax attached to online purchases, which they say short changes state and local governments.

"The money at stake is upwards of $23 billion or more," said Maureen Riehl of the National Retail Federation.

They say the only way a state receives those dollars from an online-purchase is if the store has a physical presence within its borders.

For city government, though, that rule doesn't apply.

But local experts say that doesn't mean online shopping provides no benefit.

"We have companies that are located here in Peoria that sell a lot of their products and services, mainly products obviously, online. So it's to our advantage when somebody goes online and buys something from a local company," said Rob Parks, COO of the Heartland Partnership.

Kim Goodwin agrees, and adds the recent emphasis on supporting small businesses has made this holiday season, so far, a very merry one.

"We love it. We want people to shop locally and shop some of the individual stores around. It just helps the economy overall," she said.