Watching a documentary, there was aremark from the journalist on how, due to how wildly taxation on goods may vary, from area to area, in the US, most retailers do not put the full prices on the shelves and instead just tally it at checkout.
This made no sense to me, a european, as when I go to any regular shop, prices already include all taxes applicable to the product.
There are specialty stores where VAT and other taxes may not be applied on the price on the shelf but those are usually wholesellers, selling for professionals, that already know what additional taxes will be added and at which rates, at checkout.
Not having the full price you’ll be paying, on display, seems very underhanded and a bad practice. The client should know how much they are going to pay from the moment they pick an item.
Yes.
Let me tell you when, why, and how I learned that you need to pay attention to taxes.
I was in third grade and my class had a field trip. This was 47 years ago, so the exact details of the trip are lost to time and rusty memory. The lesson remained.
There was something that the class could purchase at the end of the day on the trip and the place only took cash and the school was not doing anything to help, except tell the kids about it and the price. Which was something like $5. I told my Mom and she handed me a $5 bill, plus a quarter, which confused my 3rd grade brain. She said to due to some strange words "sales tax, which was 5% in my state at the time. Got to school that morning and all my classmates were proud that they had their $5 bill, but none seemed to have a quarter. So I kept the presence of my quarter a secret and was a little embarrassed about it. Yes, I was young and stupid. Now I am old and stupid.
When it came time to purchase the whatsit at the end of the day, me and one other of my classmates produced a quarter to buy it. The teachers and chaperones had to cover the sales tax for the other 20 kids and they were pissed.
I went to school and learned a lesson that has stuck with me for nearly 50 years.
I think in pretax numbers and just expect the final price to be higher - how much higher I have no idea because not everything is taxed. It was a major pain in the ass when I only had cash cus I never knew how much to take with me. Now I only use credit cards so it’s much better.
I think that builds into the credit card trap.
You should not need to guess-timate how much you’re going to spend, that is the issue.
If you want to pay in cash, that’s it. Pick up the items, add it in your head, that’s it. Witholding how much you are really going to spend by not applying all charges holds you hostage.
Yes, you can just put it to your card and pay it later but why?
I use credit cards cus I get cash back and it’s also how I manage my budget - each major category has its own credit card so I can easily see how much I spend on each category per month and per year.
No amount of cashback is enough to convince me to sign up to one.
Well… maybe 100%.
Eh, I mean they’re designed to be as predatory as possible but if you do math and treat it as a debit you literally just get free money back.
Also you need a credit history here as no credit is treated as the same (if not worst) than bad credit and the only other options for establishing one is taking out loans.
If you’re okay never being able to finance a vehicle or house though, then no credit history is fine as long as you can provide full cash for those purchases up front.
I’m aware of that qwirk in your system. No such thing here. And I have a mortgage to pay.
It may help, but credit cards aren’t the reason.
Sales tax is something that can be charged at all levels of government, including individual cities in some states. It is easier to advertise one pre-tax price than deal with the variance of advertising post-tax prices.
And I keep thinking my country’s tax system is weird.
No way! That is ridiculous. That is essentially equating to create tax havens inside your own country. What is stopping people from high taxation states to just go for a shopping spree on a non-taxation one? Or even a city or town? Nothing. It makes no sense.
My country as a mainland and two autonomous regions. All taxation is designed centrally. VAT, special taxes, income, private and corporate, vehicles, land, house, etc, everything is established centrally. The autonomous regions do have the freedom to fine tune the end % of tax but really nothing else. They can’t exempt a tax, just because.
shopping spree on a non-taxation one
You have discovered Delaware.
That is awful.
It gets worse.
A lot of incorporation law is done at the state level, so most corporations are incorporated in Delaware where there are no corporate taxes and specialized corporate law courts.
A lot of credit and gift cards are out of South Dakota because that state has favorable credit card and gift card laws.
A lot of the laws of the country are written at the state level by design.
That is an entire level of idiocy and corruption by itself.
As far as I can tell, once the question about price is asked, they will make a remark about how awful the Republicans or Democrats are (depending on their leanings).
I did “tax included” when I sold stuff but it’s unusual. Yes we know there is tax, I know the tax rate here and it’s not difficult to calculate the total. Food, like groceries, is not taxable here.
I will say though - my husband wants a car and I keep having to remind him to gross up the price when he sends examples because on big things it is a big charge.
The average American does not include taxes in prices. This is also true in Canada.
That is so bizarre.
Annoying as well. Goodluck convincing anyone to change it.
It’s inconvenient for sure. Sales tax varies so much accross North America that I guess it’s easier for them to advertise that way vs. custom signs for each province/state.
That’s pretty much it. You have state, county, local/municipal taxes and it can get pretty convoluted real quick.
I would fully accept a law that allowed companies to advertise nationally the pre-tax price with a small disclaimer saying applicable taxes vary by location, and then require the in store price tags to reflect all taxes.
There’s no excuse not to anymore. Yes it does vary, and a computer can easily adjust the price.
That’s why they feel that taxes are robbery tbh. It mentally works against them.
Agreed
Many of us are in the habit of mentally calculating it wherever we live though.
For example, my state sales tax is 6.88%, my county has a .25% tax on top of that, and then there’s a metro area tax of 1% on top of that my city does not impose a separate tax of their own so total sales tax in my city is 8.13%.
When shopping we’ll do the mental math (roughly) and factor that in so it might say $39.99 + tax but I know that it’ll be a little under $44 with tax.
It’s inconvenient but, like most things, we get used to it and adapt. Also, while tax varies a lot by state, most of us don’t venture too far out of our home area so tax is roughly the same all the places we regularly go.
It would be nice to have the price listed as the price you pay but it doesn’t work as well with our current system.
Taxes aren’t on the price tag, but I figure them in as I am buying stuff. Tip too if it is at a restaurant or other tip-able service.
Edit: it does provide some transparency into where your money is going (are taxes high or is the store gauging you).
Tip is of no concern here. It’s a gratuity that may be given, outside the check, to the server.
The tax rates have to be declared on the product label. VAT is 23%, 13% or 6%, depending on the nature of the product. Basic food items and basic necessities, like baby diapers, are 6%. 13% is usually reserved fro restaurants and everything else goes into the higher rate.
Fuels, tobacco and so called luxury items have other taxes added to it, which are declared in the receipt.
It isn’t an opaque practice.
Those items you mentioned are taxes at the state or federal level so there are only 51 different tax rates to keep track of. Sales tax can vary from city to city as some municipalities have an additional sales tax.
I risk computers can deal with the brunt of the work, if will to do so exists.
That work is already done by computers (the cash registers at the local store). For what you’re are suggesting, the added workload would very much be manual human work to physically change the price tags on every item whenever the local, county, or state tax rates change.
Ignore it.
Sometimes I am like egh, that’s annoying and more than I expected and then carry on with buying whatever it is. But that is a more recent thing, now that am being more frugal. For like a decade I would say I never acknowledged it or thought about it.
I generally assume what I’m buying will cost 10% to 20% more from taxes and/or tips getting added at checkout. I agree it doesnt make sense and seems underhanded, they could post the actual prices if they wanted to.
As someone not used to it, I find it very annoying. Where I live the final sale price/cost to consumers is what must be advertised, by law. I remember car dealers attempted to omit delivery cost, a good while back, but that shit was shut down quick.
Is sales tax consistent across your country?
Yes, it’s a flat rate, which makes things a bit easier I suppose.
people usually just say the pre tax price and everyone already knows the sales tax. Sometimes people say the total, but that’s usually for smaller items. For example:
A sandwich from a deli costs like $11 total and that’s what they’d say.
A video game costs 59.99 and people would say it’s $60, but everyone knows it’ll really be like $66.
Usually people talk about the pre tax cost.
I have a tinfoil hat theory that the taxes are kept like that to give people a recurring, low grade, anti-tax sentiment. There are a lot of crazy idiots that don’t want government to exist here, so by making people feel bad about paying taxes (instead of obscuring that by baking it into the listed price) they can win sympathy.
Take the hat off. Weirder theories exist.
As someone who lives in one of the states without sales tax, i used to hate it because nothing would ever be exact change, id see a candy bar listed for $1 but actually ifa 1.05 or aomething and now Ive gotta deal with a bunch of coins. Arizona iced tea for 99c… Nah bro you still need aother 12 cents (gotta pay the bottle deposit too)
Its not as annoying now that i pay for most stuff with a card, but in still resent all the other states that force people to do math.
An extra six percent isn’t really the difference between a big purchase and a small one, so it’s pretty much just background noise for me. I know to leave some wiggle room if my budget is tight but don’t make the effort to calculate my technical maximum. Worst case scenario I get one less item than I planned.
We don’t include the tax. You just expect what you pay at the till to be some percent more than the sum of shelf prices. It’s a known number, 5% where I live except on a few untaxed items (which I should mention isn’t the US, just nearby).
Who could have guessed u/CanadaPlus wasn’t American!
We just think about the base price, but the taxes. Then at checkout you’re told “oh, that number you had in your head? Add 5-20% more as a surprise”
It’s a terrible system, very anti consumer. You never get used to it
Oh, and it also has the fun side effect of making sure nothing ends on a dollar amount
The whole argument of “it’s cause there’s so much variation in tax amount” never really made sense to me as an excuse. Like… you’d print the labels at the store wouldn’t you? So you just put the tax amount in the system for that store and print it… the only way it makes sense is if for some reason you’re shipping price tags across the country
There are often nation-wide or region-wide advertising campaigns that proudly display a price. If individual cities have different sales taxes, that would make it hard. Personally, I still don’t find this to be a good reason. Just charge a single amount anyway and eat the costs in the high tax area. Price it in.
Sales tax varies city by city, which means a business cannot have a central distribution center where price tagging occurs, nor could they move inventory (something that happens in retail quite often) - substantially shifting the burden onto businesses. For better or worse, I’m sure that’s how the price tagging discussion went…
All of that is nonsense.
I worked for 2 corporate retail chains that would send the stores the price labels for sales and we would print out a file for other tags.
In a quarter, most labels would be replaced and they would send irregular price changes every week. We would spend probably 10 man-hours a week taking down and putting up labels under typical operations.
Items don’t generally move far or often, except for rotating display spaces at the ends of aisles for promotional items where every tag changes. Every few years they might make radical changes to item placements, but they tend not to because it confuses customers.
There is no reason to exclude the tax in the price labels except for tradition and/or concealing how much you will actually pay with the tax added. Most people know what the taxes are in the area they shop and will just round up to the next dollar or add 10% if they are on a budget.
Bring on wireless electronic price tags that show the price including tax.
wireless electronic price tags
I’d rather not… They already use these to implement dynamic pricing based on stock levels, best before dates, etc. Only a matter of time before they feed surveillance camera data to the system to take the appearances of nearby customers into account. (I wonder if it’s already a thing in those no-register stores in the States? They can probably also pull in your shopping history, search history, etc?)
Why would they take appearance into consideration when they can detect your phone and know exactly what your income level is and your purchasing habits?
Would you support an individualized pricing system if it meant that disadvantaged individuals could afford a better quality of life that is subsidized by charging wealthy people more?
Would you support an individualized pricing system if it meant that disadvantaged individuals could afford a better quality of life that is subsidized by charging wealthy people more?
You’re not from around here, are you, pardner?
Shhhh, I am providing an argument in favor of a dynamic pricing structure that they have expressed opposition to.
We are talking about two different things. I mean clothing tags. You are right about prices on shelves.
Meanwhile, electronic price tags have been introduced in the market.
It’s these small e-ink devices that are tethered to a central input station in the backroom, where a person inputs prices.
I’ve seen tags change in front of my eyes, updating price, adding promotional info or changing the product available on shelf.
Inventory movements are not an excuse, I’d say. Regardless the end sale price, if a product is not sold, it is just inventory, which value is fixed for the company.
Lidl moves tons of non perishable inventory from central wharehouses to stores, daily, and they could not care what the end price was at the store. A given item may cost an X amount in a given season, disappear for a couple of months, then return to the shelves with a different price. The inventory value does not oscilate.
That is harder for clothing stores, just functionally. Probably works for things that are more stationary.
Why would that be?
I’ve seen tags change in front of my eyes,
I don’t understand how that’s better in any way? If customers should know how much an item costs, the cost shouldn’t change during store hours at all.
In the US, we’re using those tags to implement surge pricing. Even if we included tax on the tag, you still don’t know how much it costs until you check out, because these tags let companies change the price at will.
I’ve seen a tag change price but that price would only take effect the next day, as the store would be having a promotion on peaches. I simply asked for a clarification and the tag was rolled back.
On the day price changes are only done to clear perishables that otherwise will end in the trash, like fresh pastries or bread. And such changes can only take effect near to the closing hours of the store. Price variations throughout the day is a crime and stores have been heavily fined for it.
I’ve not worked in retail in over 2 decades, we printed all the price labels at the store back then and we have a universal VAT rate across the country meaning they could have done it centrally. I don’t think the UK is over 30 years more technologically advanced than the US making that impossible.
I don’t think the retailers are saying they can’t price at the store-level. They are saying it is inefficient and burdensome - particularly as inventory moves (and would need to be recalculated and retagged). Anywho, it’s something you get used to, even if it is a weird way to operate.
Inventory can move store to store but the price tag remains on the shelf at the store, so this argument doesn’t really make sense to me.
Many/most put the tag right on the item not the shelf. Thats for groceries only. And even here a lot.
I only see that at independent corner stores here. If we’re talking inefficiency, having to label every single product on the shelf is peak inefficiency.
One label for 10s of products is less efficient than separate labels for every product. Explain exactly how that works. This is what Walmart, target, kroger, aldis, and every other major chain that actually has to deal with logistics does.
We are talking about different things. I’m talking about clothing.
Its so they can advertise a lower price.
