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.
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.
🤷♂️
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
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!
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.
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 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 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.
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
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…
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.
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.
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?
We are talking about two different things. I mean clothing tags. You are right about prices on shelves.
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.
Its so they can advertise a lower price.
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.
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.
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…”
Only an American would assume that when someone says people they mean companies instead of, you know, people. 🤦♂️
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.
No one is deceived. We all know there are taxes.
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?
Sure, sounds nice. But is it bad enough that people feel compelled to create a ballot measure and get it changed? Apparently not.
Yeah apparently so. I guess it’s not the top of mind problem Americans have right now.
Over here various pro-consumer watchdog organisations would protest wildly and the merchant would most likely get fined for false advertising. So the whole thing feels a bit alien to me.
Sure if we started the whole tax thing today we may do it different. But it’s culture created over time. Our sales taxes all started during and shortly after the Great Depression in the 1920s. I’m sure store owners likely preferred people realize what they were charging vs the govts take. This is why I like it now. It’s very clear what the govt is taking and what the store is charging. It doesn’t bug me at all to have it added on at the register. It’s all I’ve known for 40 years. Currently I even live in a state with no sales tax (recently moved here), but I’m in a small tourist town that implemented a “resort sales tax” of 1% to help pay for city services related to tourism.
I think there’s also a fundamental cultural difference in that “govts take”. We don’t normally see taxes as “taking” in that sense, but I fully understand where you’re coming from - it makes sense and seems to work for you guys.
Whether or not I factor in tax is entirely dependent on the size of the purchase I’m making. For the vast majority of purchases I make on a daily basis, I don’t think about it at all. 7% of $2.99 is negligible to me. However, if I’m making a large purchase, or if it’s a purchase which I know is subject to additional taxes beyond the sales tax, then I might consider it. 7% of $2.99 may be negligible, but 7% of $29,999 is a significant amount all by its lonesome.
For most people, I’d imagine this is most common when it comes to purchasing vehicles, as those tend to carry large prices and special taxes which results in a significant increase in price. For example, I purchased a new vehicle a couple years ago for MSRP, but wound up paying several thousand dollars more than that due to various taxes and the registration fees. I didn’t know exactly how much those surcharges would be (though I easily could have calculated them by visiting my state’s Department of Motor Vehicles website and plugging a figure or two into their calculator) but I had a ball park idea which I could budget around. Also, I’m pretty sure the dealership I bought from provided an estimated total purchase price which included the fees for the locality it was located in. Unfortunately, most of that was irrelevant to me, as I had traveled from another state to purchase this vehicle, which illustrates the minor frustrations that an all-inclusive price tag would introduce in America.
Like, I don’t think you’re wrong for thinking it’s odd, and yes, there are ways to fix it, but it’s just such a non-issue (not to mention America’s “touchy” relationship with taxation meaning these attempts to “fix” things would rapidly become politicized) that no one cares to do anything about it. As someone else said, we intuitively learn what the rough tax rate will be for our common purchases and just factor that in.
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.
Agreed
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.
That’s pretty much it. You have state, county, local/municipal taxes and it can get pretty convoluted real quick.
Annoying as well. Goodluck convincing anyone to change it.
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.
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.
