Showing posts with label currency gouging. Show all posts
Showing posts with label currency gouging. Show all posts

17 June 2011

the currency gouging index

i'm starting to include references to this more and more as i post. you'll notice it mostly in posts related to cosmetics, because those are where there is a clear difference in canadian versus u.s. prices.

canadian vs u.s. dollar 2010- 2011
basically, the story is this:

the canadian dollar is worth more than the american dollar and has been for several months. in fact, for the last couple of years, we've been dancing with parity on an ongoing basis. many canadian consumers can accept the fact that our import taxes are a little higher, or that there is duty to be paid on imported goods, but considering that for every canadian dollar paid, american companies are making money if they charge the same price as they do to americans. [e.g., using yesterday's exchange rate from the bank of canada- a product sold at $25usd to a canadian customer would net $25.81usd if the customer paid in canadian dollars]

we are a reasonable people. most of us do not mind paying a couple of extra dollars for the convenience of being able to buy in our own country [although even saying that seems weird], but there are limits and many companies insist on pushing those limits. and so i give you the cosmetics "currency gouging" hall of shame/ fame for summer 2011. [i'm choosing cosmetics because the price changes from country to country. buying music is paid in usd and costs the same no matter what currency is in your bank account, which makes it an awesome time to buy music. i'm perfectly willing to look at any other industries if people are interested.]

hall of shame

armani- hmm... one eyes to kill eye shadow in the u.s.= $32. in canada? $42. one rouge d'armani lipstick in the u.s.= $30. in canada? $38. are you f**king kidding me? armani products are stellar, but you're going to have to do a lot of convincing to get me to believe they're that much better in canada than they are in the united states.

m.a.c.- well, at first glance, the differences don't seem so huge- $14.50usd vs. $17.50cad for a lipstick or eye shadow- until you consider that m.a.c. are a f**king canadian company. seriously, despite the fact that they were purchased by estee lauder, their head office is still located in toronto [ok, technically newmarket, but they're seriously a block and a half north]. they should be charging us less!

givenchy- you'll see in my previous post that the pricing for a gloss from givenchy is $29cad versus $26.50usd. that's not so bad, right? well no, but on my on line order, i got dinged an extra $1.88 on the givenchy gloss only for "duty". what the hell is the inflated canadian price covering if it's not the extra import taxes we call "duty"? you're double dipping, givenchy.

hall of fame

guerlain- i was originally just going to make this a hall of shame, but i felt that i would be doing a disservice. guerlain are a really expensive brand, which is kind of sad because more people should be able to enjoy their products. the one thing that you can say about guerlain is that they're pretty much equally out of reach no matter what side of the border you stand on. price of a rouge g in the u.s.? $46. in canada? $50. price of a limited edition rouge g lipstick in the u.s.? $47. in canada? $50. that little differential is actually a key component of the guerlain pricing strategy. in fact, permanent products are priced above [but not grossly above] the exchange rate, but limited edition products are priced much closer to the current exchange rate. in fact, guerlain's limited edition blush/ bronzer powders are priced the same or less in canada as they are in the u.s. why do that when the regular products maintain a difference? guerlain is being very smart. they know that with the canadian dollar at parity or above, selling at the same price is a winning proposition. so for products that are only available a limited time, why not offer them at the same price? for permanent products, they are betting that, over the long term, the canadian dollar will be lower than the american, so it makes sense to guard permanent prices higher to protect themselves from a cad collapse. smart, smart, smart business and an excellent way to curry favour with the folks north of the border.
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