MEL3E
Mathematics for Work and Everyday Life
Unit 3: Shopping
Activity 3: Shopping Online
In 2019, shipping data showed that 80% of Canadians had shopped online that year and that 18% of Canadians made 60% of all online purchases in Canada. (Canada Post)
Consider Yor Online Shopping Experience
Consider:
- Have you ever purchased anything online?
- What are some advantages of shopping online?
- What are some disadvantages of shopping online?
- What types of merchandise would you consider buying online?
- When would you rather buy something in a physical store?
Local Store, Canadian Online Retailer or U.S. Retailer?
When you compare the prices of items found in local stores and online retailers, you may find significant differences. Online stores often have lower prices but may also have extra costs that you hadn't considered. What looks like a great online deal may end up being the most expensive option.
The table below shows you some of the factors you should consider when comparing your purchasing options.
| Retailer | Cost of Item | Sales Tax | Shipping and Insurance | Currency Conversion | Duties and Import Fees | Warranty Coverage |
|---|---|---|---|---|---|---|
| Physical Store | Can be higher than other options | Yes (paid at time of purchase) | No | No | No | Covered by Canadian warranties |
| Canadian Online Retailer | Can be lower than a physical store | Yes (paid at time of purchase) | Yes | No | No | Covered by Canadian warranties |
| US Online Retailer | Usually lower, but in US dollars. | Yes (paid when imported) | Yes | Yes | Possibly | Possibly not covered by warranty |
Shipping Costs and Insurance
Canadian and U.S. online retailers may charge you shipping fees to deliver your order. When shopping at a U.S. online store, be sure you pay attention to the shipping rates to Canada, as they may be higher than the standard shipping they advertise.
Some online stores allow you to return merchandise that is damaged during delivery. Make sure you research a retailer's policy on returning damaged goods. For expensive items that are easily damaged, consider purchasing additional insurance against breakage during shipping.
Photo Credit: Ben Hinc via Flickr.com
Exchange Rate
Photo Credit: Jose Hernandez via Flickr.com
On a U.S. online retailer site, the prices are listed in U.S. dollars. Although the prices are usually lower than the same item on a Canadian site, you have to consider the exchange rate.
In order to buy something in U.S. dollars, you must first convert your Canadian currency into U.S. currency.
The foreign exchange rate (CAD to U.S.) describes what you have to pay in Canadian currency to get one U.S. dollar. When shopping on a U.S.-based online site, you can use online currency converters (search USD+CAD+converter) to calculate the cost in Canadian dollars.
Tips
When you use a credit card to buy something in U.S. dollars, the credit card company converts the funds for you. However, companies will often add an extra currency exchange fee when converting your money. Find out the exchange rate that your credit card company is offering and compare it to the official rate.
Crossing the Border: Taxes and Duties
When you buy something from a U.S.-based online store, no sales tax is collected. But don't get too excited. All goods with a value of $20.00 or more must pay HST when they cross the border from the U.S. into Canada.
A duty is another fee that must be paid for some imported goods. Currently, there is no duty on goods created in the United States, Canada or Mexico when they enter Canada. However, if you buy goods manufactured in other countries, you may have to pay this extra charge.
Photo Credit: Joel Dinda via Flickr.com
Tips
Note that most goods will be shipped to you by a courier company. These companies will charge you a brokerage fee for collecting the HST/duties from you and giving them to customs. This fee is in addition to the HST/duty fees that you owe and can be as high as 50% of the value of the item shipped! You are not required to pay this fee and can pay the tax and duties yourself with the Canadian Border Services Agency by following this procedure.
Warranties
If the item you're buying is covered by a warranty, make sure that the warranty covers items imported to Canada. Some companies restrict their warranties to the country in which they're sold. It may be worth the extra cost of buying goods from a Canadian retailer if it means your purchase is covered by a warranty.
Photo Credit: Kate via Flickr.com
Comparing 'Brick and Mortar' and Online Purchasing Options
You're looking for a new set of headphones and you find the three options for buying the pair that you want.
- EDepot (a local store)
- The Sound Shack (U.S.-based Online Store)
- The Jungle (Canadian Online Store)
The prices are shown below.
| EDepot (Local Store) |
The Sound Shack (U.S. Online Store) |
The Jungle (Canadian Online Store) |
|---|---|---|
| $329.99 CAD EDepot is having a sale for 25% off all items in the store. |
$199.95 USD Extra Fees: $14.35 Shipping and Handling Brokerage Fees: $17.42 |
$249.99 CAD + Free Shipping |
Reflection
Using this spreadsheet, calculate the final cost of the three buying options.
Which one is the least expensive option?
Shopping Online Assignment
Choose an item over $300.00 that you would like to buy. Find three options for buying the item:
- a local retailer
- a Canadian-based online retailer
- a U.S.-based online retailer
Compare the three options by using this spreadsheet.
Answer the following questions:
- Which option is the least expensive?
- Which option would you choose?
- What are your reasons for choosing that option?
- What are some reasons that a shopper m ight choose an option other than the price?
Introduction
Learning Goals and Success Criteria
Rubric