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.
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
Its so they can advertise a lower price.
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…
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.
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.
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.
The average American does not include taxes in prices. This is also true in Canada.
That is so bizarre.
That’s why they feel that taxes are robbery tbh. It mentally works against them.
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.
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.
When you say “people” you’re really talking about the stores, right? The stores just put the price they charge, not the taxes which they don’t get. Yes, taxes vary from state to state, but it’s not like we’re all going to different states every day. I know what the tax rate is in my area, and so I know to add that when I see a price in a store.
If you really mean “people” as in customers, it depends. If I’m telling someone that a store has a good price, I’ll just quote the store’s price. But sometimes when I’m talking about what I paid, I’ll include everything “Wow, I can’t believe this cart of groceries was $150…”
It would require zero effort for the stores to post the actual prices. This is just another example of Capitalism Stockholm Syndrome that’s displayed by so many Americans. This practice is dishonest and serves no other purpose but to deceive the consumer.
It’s certainly for the store’s benefit, not the consumer’s, but you’re over stating things. Sure, there’s no incentive for the store too post anything other than the price they charge, and not the state and federal charges the government layers on top of that. There’s no law requiring them to do so, and obviously they’d rather post the smaller price. We could change that by making it a law, but no one really seems to care that much - just doesn’t seem like that big of a deal.
Counterpoint to this is gas stations and the fact that they include taxes in the price on the giant sign by the road. Why should retail be any different?
Why do consumers accept a system like this? Wouldn’t it be just better for consumers if the shop pricetag represented the exact amount you have to pay at the counter?
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!
I mean, if you read my username it should be obvious. And it comes up often enough it was worth putting it in the username. It’s just that not everybody does. and I’m going against OPs expectations by answering.
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?
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 has 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.
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.
A lot of convenience stores around me don’t even have any prices shown on many items. Drives me crazy, but I guess many people are used to it? Sales tax is usually around 7% in most places I’ve been to, so if I know the price of an item, I know, roughly, what to expect.
No price means I won’t buy. Because it means probably 200% mark up at least
Sales taxes vary based on city, county, and state rates. They can also be waived if you, the buyer, have a reseller permit or are purchasing for a non profit.
It’s not underhanded and is annoying for sellers too because they have to know a lot about sales taxes as well. They could show you the price with local taxes included but then most customers would think their prices are too high comparing to other merchants.
So the price shown on the product in a store or online is only what the merchant is selling it for. The price at the register is what the merchant is selling it for plus the taxes they have to collect (unless you’re excluded for the reasons mentioned above).
The tax is a buyer obligation, not a seller obligation but sellers have to be an intermediary. So buyers should be educated about the tax laws that apply to them (in this system).
The receipt should be clearly marked so you know exactly how much went to the product and how much went to tax. You can itemize and deduct your sales taxes from your federal income taxes if you’re so inclined to track it (and it’s a better result than the standard deduction)
It’s more complex than a VAT system but enables local jurisdictions to levy taxes to pay for various things applicable to their area.
🤷♂️
