Why Canadians Love To Shop In The U.S.
Ever wonder why Canadians get so excited crossing the border to go shopping?
The main trigger is usually when the Canadian dollar (CAD) is at par with the USD, but even if it isn’t, there are plenty of other reasons to skip across that line, especially if you are a young woman shopper such as myself.
I enjoy shopping for clothes, but sometimes the unjustifiably high prices in Canada force me to wait until I cross the border to pick up what I need, or do without.
This really helps me to curb my shopping impulses and continue figuring out how to not spend more than I make.
1. U.S.-Only Stores
The U.S. has stores and recognizable brands that are coveted by Canadians everywhere, the biggest one being Target, lovingly nicknamed “Tarjay” by loyal fans.
Going across the border just to shop at Target is not unheard of, seeing as basic essentials and even things for the home are not only stylish, but also affordable.
Sure, we have other discount stores here, but it just isn’t the same and the goods are not as fashionable and at such affordable prices, even with the exchange rate factored in.
Aside from Target, another store I like to browse online is J.Crew. The retailer doesn’t have brick-and-mortar stores here in Canada, so I have no choice but to buy what I want online, pay the high shipping costs to get the items to me and cross my fingers in hopes that it fits.
2. A Larger Variety of Goods
Even when we have certain brands from the U.S. available in stores, it is never the whole line. Take for instance the brand Anthropologie.
They have a single Canadian store in Toronto, but it doesn’t carry the whole line of Anthropologie clothing available to American shoppers, and even the the Canadian online store itself is different from the American one.
As a shopper, it is easy to get frustrated because you want to purchase something you saw on their U.S. site, only to realize it is not available for Canadians.
There are other instances where I or my family members have tried to find certain specialty products, only to realize it can only be ordered online from an American retailer.
3. Fixed Prices on Products are Lower
The suggested retail price on many products, like books for example, are a good 10% to 30% lower in the U.S.
Even with the dollar having flirted with par for the past few years, retailers haven’t adjusted their pricing for Canadians and cite other factors such as higher distribution costs to justify the higher price tag.
I can understand a slight increase due to distribution, but a 30% increase?
Even makeup can cost more in Canada! For instance, a best-seller makeup palette by Urban Decay sells for $48 USD in the United States, but its price goes up to $53 once it crosses the border into our greedy little paws.
4. Deals and Discounts are better
Even if you don’t take into account the dollar being at par, or that the printed retail prices are lower in the States, the U.S. generally has better deals to offer.
With more competition from so many companies jostling for attention, the deals are juicier.
5. Gas and food are cheaper, too
Now, I know this isn’t true for every American city, but just looking at the price of heirloom tomatoes or gasoline in the U.S. can make a Canadian frustrated.
Americans pay on average 25% – 40% less for gas, after the gallons have been converted to liters.
As for food, Americans pay at least 20% less for staples such as dairy, meat and even fresh fruit or vegetables.
6. Lower Sales Taxes and Duty-Free Allowances
The States doesn’t offer any sales tax refunds to Canadians shopping across the border, but there are still savings to be had.
Consider, for example, that the average American sales tax rate is 8.62%, whereas the taxes in Quebec and Ontario (two provinces I frequent), are at 13%.
Other savings can be found in duty-free allowances:
If you stay 24 hours in the States, you don’t have to pay Canadian taxes on purchases under $50.
48 hours? Now you’re looking at not having to pay Canadian taxes on purchases under $400.
If you stay for a week, you’re able to bring back $750 worth of goods and not pay any Canadian taxes.
THE BOTTOM LINE
In conclusion, while Canada has some pretty fantastic benefits such as the TFSA, universal health care and a higher minimum wage (the lowest being $8.00/hour in British Columbia), many Canadians (myself included) still feel like the shopping will always be better on the other side.
Oh, and the bright side to all of this? Since prices in Canada feel so artificially inflated to me, I often end up saving my money rather than shopping — which is ultimately better for my bank account.
Serena blogs at Fabulously Broke in the City, a lifestyle blog with a hint of money talk, and for The Everyday Minimalist, a minimalist blog that is all about living with less but only the best. Serena also occasionally freelances and writes for Investopedia.