Recently, internet shopping has exploded in popularity due to the fact that it is generally cheaper to shop online than at a physical store location. Online retailers can afford to sell their products at a lower cost to consumers because many of the costs of operating a traditional brick-and-mortar store do not apply to them. For instance, online retailers do not have to pay for utilities used by a physical store, nor do they have to pay employees to staff the store during hours of operation. These savings are most often passed on to the customer as an added incentive to purchase from the online retailer rather than a physical storefront.
But every so often there can be additional hidden costs that come with the convenience of online shopping. In this article, we’ll cover some of the common ways that online shopping can tack on extra fees and how to avoid them.
What Are the Extra Costs Associated with Online Shopping?
One of the primary reasons for the additional costs associated with online shopping is that they come from international retailers. These additional fees come from three sources: the conversion rate of the two currencies involved, international transaction fees, and international shipping. Firstly, currency conversion rates will oftentimes not be in your favor. If you are an American who is purchasing products from the United Kingdom, then you have to keep in mind that every one of your dollars is only worth 0.74 pounds. This means you’d be paying roughly $1.35 for every £1 displayed in the price.
On top of the hidden extra costs of conversion rates, you also have to consider international transaction fees. An international transaction fee is an additional cost that is passed from card-issuing companies to consumers who are making a purchase that is not priced in their home currency. This fee can be as much as 3% of the entire price of the purchase. This may not sound like a huge chunk of change initially, but it can most certainly stack up to a meaningful amount.
The final way an online purchase can come with additional costs is through international shipping. This is typically the most expensive part of any international purchase. In some cases, an international shipping fee can be just as expensive, or even be more expensive than the purchase itself.
How Can I Avoid These Additional Costs?
Conversion rates and international fees are tricky because they can either be circumvented entirely, or they will have to just be accepted. The only surefire way to avoid conversion rates and international fees is if the product you are purchasing can be bought from a retailer that offers to sell the product in your home currency. If this is the case, then you can purchase the product from that retailer and avoid having to pay a higher price altogether. But if the product you are buying is only available from a retailer who deals in a foreign currency, then you may just have to pay that price. Remember that some retailers offer the option to change the currency the transaction will be completed with. This is usually found in a drop-down menu near the price of the product.
Quick Tips to Save Money When Shopping Online
Buy At the Right Time
By shopping at times when deals are common you can save loads of money. Most companies will offer sales around the new year, the middle of summer, and sometime in the spring. Some online retailers such as Amazon even offer a wish list that keeps track of the current price of your saved items and will notify you when they’ve gone on sale.
Flat Rate Shipping
USPS flat rate boxes can save you money whenever free shipping isn’t an option. These boxes have a flat rate used to determine shipping prices for any shipment under 70 pounds. This can especially save you money on long-distance shipping for heavier packages.
Find Cheaper Alternatives
Brand loyalty is great for supporting local businesses and for consistently ordering a product you trust, but many times there are cheaper alternatives to the products we order. Take some time to do some research on alternatives to the company you generally purchase from and find out if there are cheaper alternatives that serve the same purpose.