Price Gouging

Since moving to Canada from the US, the one thing that irritates me the most is how Canadians get price gouged by companies based in the US. When questioned on this, most companies have very simplistic reasons for it: price to ship across the border, differences in packaging requirements, and even the difference between the US and Canadian dollar at any given time. When it is pointed out that none of these (or, if you prefer, all of these) can account for the huge differences in price between exactly the same goods in either country, they stammer, hem and haw, and usually cut the q&a short very abruptly. The reason being, there is no good reason for the huge markups with which they sell goods in Canada.

As an example, I broke my mouse yesterday. I thought it might be time to get a nice, new gaming mouse for my main PC on which I play games. I did a little research and discovered that a particular mouse, the Razer Deathadder V2 is a nice, solid, wired gaming mouse. The articles all pointed out that the price of the mouse is right around $70. A little steeper than the typical $20 I spend on a generic, "over the counter" type of mouse, but a gaming mouse has more buttons, are generally larger, have better lasers (DPI), and are generally more rugged -- just what I need.

I'm a fan of Newegg. So I went to Newegg.ca to see the cost to get it to me as fast as possible. I blanched when I saw $229.99 plus $29.99 shipping! I went to Newegg.com and looked at, literally, the exact same mouse sold by the exact same company and saw $85.98 and free shipping. When you add in shipping to the Canadian cost, the exact same mouse is slightly more than 3 times the cost of the US mouse!

Newegg.ca on the left, Newegg.com on the right

In case you think this might be because Newegg is using different sellers, I clicked on both and went to the exact page for each device. Both are being sold by the same third-party vendor.

Highlighted: The third-party company selling the device to both .ca and .com

As I post this, the Canadian dollar is at $0.74 of the US dollar. In other words, to buy 74 cents of US currency would cost you a full dollar of Canadian currency. Let's round that to a nice even .75 cents to make the math slightly easier and any good sent to Canada would cost 25% more than in the US just based on the differences in the dollars at this particular moment. 

Note, there have been times when the two dollars have been at par and they are usually closer to par than this current value.

That would mean that the mouse in question, just based on the dollar difference, should cost $107.48 Canadian. The price listed, without shipping, is still slightly over double that difference. Can shipping across the border account for that? Not by a long shot. Can the differences in taxation account for that? Not even close. Can both together account for a more than double value on the same good? Nope.

A quick search of Google finds articles going back decades about this disparity. It is especially galling when the dollars are close to par and Canadians should be paying only the difference in taxes and import fees, making the goods purchased only a few bucks more. But when companies can get away with pricing a good at 3x the cost they sell it for in the US, something has to give.

People often ask me why my wife and I travel across the border so often. It is because, if we save up and ship a bunch of things at once, the cost of the goods in US dollars, even with the taxation and tariffs we may pay recrossing the border, plus the gas and time to get it from the US postal service, it is STILL cheaper than buying it from a Canadian store or a US store with a Canadian presence (like Newegg or the third-party vendor in the examples above). This is why so many of the US border states with Canada are so desperate to have the Canadian/US border re-opened as soon as possible during this COVID-19 pandemic-- they are losing out on billions of dollars of Canadian purchases and tourism. Nearly 90% of all Canadian live within 100 miles of the US border and a majority of them make multiple trips across the border for things that are worth it, like food, clothing, and electronics. All those border cities are hurting even worse than other locations because they have been cut off from both their US customers and the Canadian tourists that regularly shop there. 

Note, the Canadian government sees the absolute clusterfuck that the Trump administration has made of the pandemic and refuses to reopen the border even when the US begged them to this month and last month. And, frankly, with the second spike already forming in the US earlier than expected due to the idiocy of so many people, they were right to. They will probably keep the border closed through the end of the year, at least, at this rate.

Canadian have often said, and they mean it, that they understand that there are some differences in price between the same goods sold in the US and Canada. They understand that the dollars are not always near-par, they understand there are some shipping and taxes involved, and they are willing to pay those differences. But when you see an obvious price gouge like Newegg and their third-party vendor doing with this mouse, that is when Canadians get angry. That is when you hear about introducing legislature to force price parity. That is when you hear about Canadians possibly putting tariffs on companies that use these predatory practices. We just want to be treated fairly!