It most definitely is not offset.
BBTS: $200 figure + $4 shipping = $204 (with free packout service)
SS: ($200 figure + 7.25% CA sales tax) + ~$20 shipping = ~$234.50 (~$244.50 with packout)
Yeah, the rewards kicks 5% back to you ($10 in my example), but that's $10 that HAS to be spent at SS...