A big story this week has been Wal-Mart’s decision to offer free shipping on everything this holiday season.

The sluggish economy has many of us a little weary as the holidays come into full view. Saving a few bucks by shopping with a large on-line retailer may seem like a logical choice but is “free shipping” really free? It turns out, what you lose may be bigger than what you save.

Every dollar you spend at local independent businesses grows by 300 percent in terms of economic benefit for your community. How does your community benefit economically when you shop local? Speaking from the experience of my family’s business, here is what happens with the money you spend at Milagros:

We pay our local staff. We pay rent to our landlord who lives in the community. We hire our accountant and other professional service providers who live in the community. We purchase local advertising.  We pay our local phone company (Integra) and our local credit card processor (SwipeNow). We also contribute thousands of dollars to support local schools, local community events like Sunday Parkways and Concerts in the Park, and other local non-profit efforts. Milagros is a little unique because a lot of the items we have on our shelves are locally made, so we pay more local vendors than similar stores.  Finally, like any local business, we pay state and local taxes and fees that support local public services and finally – hopefully - we take a profit home for our family to spend… wait for it… in the community!

Consider that map of how your money spent at a local retailer may cycle through your local economy. On average, every dollar you spend at a local-independent business has an economic benefit for your community that is nearly 40 percent higher than the same dollars spent at outlets of national and out of state businesses located in your area.

Now think about that same transaction with an on-line retailer located outside of your community? How much economic benefit does your community garner when you shop with an out of state retailer?

Nothing.

There is an old saying, “there is no such thing as a free lunch” someone is going to pay for that lunch one way or another.

As it turns out, “there is  no such thing as free shipping” and it may be your local economy that pays the price.