2015 has come to an end – and before we know it, it’s time to hunt for Chinese New Year goodies!
After sharing on 8 Online Shopping Traps You Should Avoid, I feel the need to share with you some sneaky additional costs of shopping online that many Singaporeans do not know of, or fail to take into consideration.
If you have ever shopped online, you may have gotten a rude shock when you saw your credit card bill at the end of the month. Therefore, I hope this article helps you.
Read on if you want to uncover the sneaky surprises online shopping may spring on you!
1) Customs Duty And Taxes
Consumers should take note of the receiving country’s regulations to avoid being held responsible for any additional costs. Customs duty and taxes are some costs that we often fail to take into consideration.
In Singapore, imported goods are subject to GST and/or duty payment. Dutiable goods, which incur both GST and duty, are:
· Intoxicating liquors
· Tobacco products
· Motor vehicles
· Petroleum products
All other goods are non-dutiable and incur GST at a rate of 7%. However, non-dutiable and non-controlled goods imported by courier services via air freight with a total Cost, Insurance and Freight (CIF) value not exceeding S$400 are granted GST relief.
That means that your online shopping with a total CIF value exceeding S$400 will incur GST. Do note that packages that have been marked as “gifts” are not spared from this Act.
2) Currency Conversion Loss
Have you used a currency calculator before you purchased and got a rude shock when you receive your bill? This is because your credit card company uses the rate set internally by the bank in question.
If you have travelled and changed foreign currency at a money changer; you will also note the different rates being offered at different money changers.
Just as the money changers are allowed to set their rates, banks can too.
More often than not, bank exchange rates will not offer the best value for your money, and you may find yourself paying more than you anticipated.
If the amount is small, there is unlikely to be a major variance but an expensive purchase could have you crying over your package.
3) Payment Gateway Fees
Just like any bank, PayPal has its internal currency conversion rates. Many online merchants allow payments with PayPal due to its secure practices, making it the world’s largest payment gateway.
Although PayPal does not charge you anything when you make a payment through them, they do impose their currency rates when you are sending a payment in foreign currency.
More often than not, PayPal exchange rates will not give you the most value for your money, and you will find yourself paying more than you expected.
With all that said, you will still find that items bought from online stores are cheaper than those in physical stores. Besides that, online shopping gives you a wider range of choices that physical stores may not necessarily provide you with.
The benefits for shopping online are endless but you need to always be aware of what you are paying for and why.