Thursday, January 12, 2012

Watching those prices

I've mentioned in the past those delightful 'buy two singles for less than the price of a double' offers that supermarkets put up and the wonders of increasing a price from say £1 to £2 for a few weeks and then advertising a 25% reduction to 'only' £1.50, but at least what the ticket says is the price you can expect to pay.

Imagine then my surprise when I ventured back to after receiving a "we miss you" email along with a 10% discount code. Flicking through and comparing prices I spotted Capitalism - A Love Story by Michael Moore. has it offered at £4.47 while has it at £3.99; an obvious choice one might think. Pop it into your cart and head for the checkout however and suddenly you're being charged £5.98 - what happened?

This happened -

Due to recent increases in Royal Mail postage charges we’ve changed our P&P structure and will  be charging £1.99 per item with immediate effect.
So that's £1.99 per item for any item and not just per delivery or just for some items. So why not just add £1.99 to all the prices? Well some are VATable and some aren't. That £3.99 is really £3.33+66p in VAT that the government wants to grab. Postage & Packing is VAT exempt so to add on that amount would mean the price of £5.98 would appear to be £4.98+£1 VAT equals less profit.

However from a consumer point of view we don't really give a damn about VAT and any reasonably sophisticated software can allocate different VAT rates to different aspects of a transaction in this instance a VAT invoice would appear as:

Capitalism - A Love Story £3.33 20% £0.66
P&P £1.99 0% £0.00
Net total £5.32
VAT £0.66
Total £5.98

Which is the end figure we the consumer wish to see.

Amazon doesn't get off quite so easily as when it comes to its Marketplace it's similar. How much would you say this copy of Dead Space is from Amazon? £14.93? Wrong it's £14.93+£0.95 shipping, which at least it states just above the Add to Basket button; so presumably that's a better price than the £13.73+£2.03 displayed in the "More buying choices"? £15.88 or £15.76 - yeah. At least Amazon is up front with the P&P whereas the first time you'll encounter this with Sendit is at Checkout.

Given the current kerfuffle regarding airlines advertising flights at low prices and then stacking on surcharges at the checkout perhaps an eye should be cast over online retailers too?


Orphi said...

Price I was quoted to fly to Geneva: £21.

Price I actually ended up paying: £400.

Notice how these figures are not in any way comparable.