Ever ordered something online, paid for it, only to find out that there is unexpected additional fee required when it is delivered to your door? According to Canadian Press, Canadians ordered $15.1 billion in goods and services on the internet in 2009, up from $12.8 billion in 2007. Yet, for the uninitiated, shopping online can be unexpectedly costly.
First, be aware that websites using the ".ca" domain are not necessarily Canadian. You can't assume that ordering an item from a ".ca" site will mean the same low shipping fees or even "free shipping" that is frequently offered to American customers shipping within the continental United States will be offered.
One way to track the true origin of your order is to check the "contact us" section of a site. Obviously, you can call and inquire but when there is no Canadian address or area code provided, chances are you're dealing with a shipment that is coming from over the border.
Determining the Actual Cost of Online Orders Shipped to Canada
Aside from the obvious issue of currency exchange rates, there are other considerations you need to make. Always check shipping and handling policies before you finalize any order online. References to Canadian customs fees and associated customs brokerage fees are not always available until you have almost completed the order - often not at all. In at least some cases, online vendors will bury the customs brokerage fees in the duty added to your invoice. How would you know the difference? You need to do your research.
Note that the final cost will have to include Canadian sales tax (which varies from province to province). Many international sites don't calculate this. It is done by Canadian customs after the item is shipped.
One way to determine the final total of your order is to know the shipping method. For starters, shipping fees charged depend on;
• The value of your goods
• The type of shipping you are using
• The distance traveled
• Size and weight of the item
• Number of items in your order
• The courier company being used.
Canada Post charges a standard fee of $5.00 for processing ($8.00 for Priority Post) in addition to tax, and the actual cost of shipping. If an order is being shipped via couriers like UPS, for example, you will be charged a slightly higher processing fee for standard shipping but you can use any number of other UPS options like "express" or "expedited". They will cost more but they allow you to avoid paying that extra fee at the door.
Look into these options where they are provided as you place an order. The least expensive shipping method is not always just about the length of time involved in getting the parcel to your door. When in doubt, find out the shipping company and call them to clarify the fees.
The North American Free Trade Agreement, (NAFTA) states that duty should not be paid on items made in the United States and transported to Canada. How many items are solely made in the US? The only way to find that out is to contact the site from which the order was placed for more information.
If your shipment is a gift, you can avoid paying duty altogether…but only if the value, in Canadian dollars, does not exceed $60.00 and there is a note to that effect accompanying the parcel. Be aware that there are stiff penalties for falsifying information about "gifts".
Customs Brokerage Fees
What is a customs broker? Essentially, this is the intermediary between the vendor and the consumer for purchases made outside of Canada. It is their job to do the processing "paperwork" involved for items crossing the border. If you were running an import business, you might expect a service such as this but for individual purchasers, it can come as quite a surprise.
It is possible to avoid paying brokerage fees and only pay the duty, You can handle the "paperwork" yourself but it can be very time-consuming and inconvenient. To do this, you must accept the invoice from the courier and send the parcel back to the courier depot. Take your slip to the Canada Customs Centre in the location where your order is being held. You then pay the duty, locate the courier's depot where the parcel is held, present your receipt from Canada Customs, and pick it up in person. A lot of effort? That is ultimately why we end up using customs brokers.
For Canadians willing to put up with expense and occasional delays of ordering online, there is a lot of selection and plenty of choice out there. Just make sure you are a wise consumer. Pay attention to the final statement before you click "place order". Don't be afraid to make inquiries or check FAQ pages on these sites themselves. Above all, never make hasty decisions! Happy shopping!
Sources:
- "Canadian Online Shopping Tops 15 B a Year" , Mon, Sept 27, 2010, Canadian Press, http://www.cbc.ca/news/story/2010/09/27/con-internet-shopping.html
- Christine Côté, Producer/Reporter, "Courier Fees: Tips: Getting around the fees", Broadcast: December 5, 2000 | http://www.cbc.ca/marketplace/pre-2007/files/home/courierfees/steps.html
- "Importing by Mail: Duty, Taxes and Handling Fees on Items Mailed to You: Duty and tax exemptions", http://www.cbsa-asfc.gc.ca/import/postal-postale/duty-droits-eng.html
- "Fed-Ex: Standard List Rates", http://www.fedex.com/ca_english/services/serviceguide/index.html
- "Canada Border Services Agency", http://www.cbsa-asfc.gc.ca/menu-eng.html
- "Postal Program - Importing by Mail: How the Process Works", http://www.cbsa-asfc.gc.ca/import/postal-postale/menu-eng.html
Jennifer Wilson - By the time you've marched around for five decades and earned a few degrees, you've learned a few things about a few things....
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