New York shopping trips / exchange rate myths

mambo

To the "100,000 Irish" who travel to New York at this time of year to do their Christmas shopping in the mistaken belief that they are automatically getting 30% better value because "I get $1.30 for every €1.00!", why don't they go to, say, Denmark, where you get 7.50 Krone for every Euro... or Japan where you'd get 150 Yen... or South Korea where you'd get 1200 Won...

Yours pedantically...

tbh

it's not really anything to do with the exchange rate per se - I don't think anyone is dumb enough to think they are getting better value simply because they get $1.30 for €1 - it's because things that cost the equiv. of €100 here cost €60 over there.

haz

mambo wrote:

To the "100,000 Irish" who travel to New York at this time of year to do their Christmas shopping in the mistaken belief that they are automatically getting 30% better value

One randomly selected reason - an Apple MacBook is 1,099 dollars from The Apple Store or 1,199 euro from Irish authorised Apple dealers. US tech prices in dollars make people spit teeth when they are below the euro price.

That 100,000 figure is madness though - is actually "travel to the US" or is it "ethnic Irish shoppers" in the US? How many travel each month in any case?

mambo

Many things are cheaper stateside, I agree, but you DO hear people say how they're getting great value "because" of the exchange rate, e.g. "the exchange is really good at the moment, Myrtle. $1.30 for every euro!".

For example, at http://www.boards.ie/vbulletin/showthread.php?t=2054872042&referrerid=59211

"Thousands of Irish people are going on shopping trips to the States and the Customs are turning a blind eye. ... And long may that...and the favorable exchange rate... continue."

Or at http://archives.tcm.ie/businesspost/2002/08/18/story651221628.asp

Price of a meal: Great value due to the exchange rate with good meals from €15 a head to posh nosh in the CN Tower for €30 each.

If the exchange rate is "good" or "favourable", it's because you get MORE dollars per euro now than you did, say, a year ago.

But it's "bad" if you get less dollars than in the past, regardless of what the actual rate is.

tbh

I don't get your point?

edit: are you saying that people think that $1.30 is the same as €1.30? just because they more physical money, they think they are better off? I'd be surprised if many people thought that, tbh

Manny7

I'm missing your point too...if you buy something in the US on a "good" exchange day, it will cost you less in Euro than if you bought it on a "bad" day. This applies to any of the countries you mention above; eg if I buy a meal in Tokyo for JPY10,000 when the yen is 135 against the euro, it will cost me the equivalent of €74, but if I buy it on a day when the rate is 145 it will cost me €69. Nothing has changed except the exchange rate, therefore the meal is cheaper for me due to the exchange rate. Or am I missing what you're saying?

EDIT: Rereading your first post, I see you mention people think they get 30% better value because the rate is 1.30. Is that the mistaken belief you have a problem with rather than the fact that exchange rate fluctuations can change the cost of something?

mambo

Many things are cheaper in the US because they're cheaper in the US (because of different economies of scale, lower wages for staff who get tipped more, etc. etc.)
Some things are more expensive I'm sure, e.g. healthcare.

The exchange rate is pretty much irrelevant, provide it remains fairly constant (which it has over the last few years).

Wishbone Ash

mambo wrote:

The exchange rate is pretty much irrelevant, provide it remains fairly constant (which it has over the last few years).

Yes. Many people who go will buy, for example, 10 Hilfiger/Lauren etc. shirts. They cost approx. €70 -€90 each here. In the US they are approx.$25-$30. Regardless of moderate exchange rates, that's a significant saving.

Manny7

Fair point about things being cheaper over there, but the exchange rate hasn't remained that stable. Over the last year alone the range is 1.17 at the start of last December to 1.29/1.30 today. That's a difference of over $1,000 if you're spending €10,000.

haz

And the Sunday Times today (http://www.timesonline.co.uk/newspaper/0,,176-2483915,00.html) reports that returning Irish shoppers are being whalloped for the VAT when they come back through Dublin Airport - the maximum duty-free limit is 175 euro, and there is a fine if you go through the green channel.

The Sunday Business Show said cannier shoppers FedEx their booty home from New York.

mcaul

Wishbone Ash wrote:

Yes. Many people who go will buy, for example, 10 Hilfiger/Lauren etc. shirts. They cost approx. €70 -€90 each here. In the US they are approx.$25-$30. Regardless of moderate exchange rates, that's a significant saving.

Totally disagree with this.

Standard Hilfiger shirts are $75 - $90 in USA Hilfiger stores. EXACT same shirts in Hilfiger stores here are €75 - €95. (Comparison was made 2 weeks ago in indianapolis against Hilfiger store in Newbridge) In Ireland you have 21% VAT included, in USA you have sales tax of 8 - 12% added at the till.

Same with all electronics - price in USA is excluding VAT - price in Irelandis including VAT. The saving that used to there simly aren't there any more.

You can get good value in the outlet centres, but you get this in Kildare outlet too - €45 for valentino shirts, €200 for Valentino suit, €30 for levis jeans.


Pricing difference between europe and usa has changed since the anti-dumping measures and duties on Chinese product was abolished approx 2 years ago (Jan 1st 2005) - thus all product for boith europe & usa can now be made together in the smae factory in China - previously European garments were made in higher cost countries due to restrictions.

Sizzler

haz wrote:

And the Sunday Times today (http://www.timesonline.co.uk/newspaper/0,,176-2483915,00.html) reports that returning Irish shoppers are being whalloped for the VAT when they come back through Dublin Airport - the maximum duty-free limit is 175 euro, and there is a fine if you go through the green channel.

The Sunday Business Show said cannier shoppers FedEx their booty home from New York.

I think thats just to get the sh1ts up people....fear by media, they dont actually go thru with it for every USA flight. Theres also a question mark over how they assess your purchases if you dont have labels on? How can they prove you didnt have the gear going over? Also if you bought a $500 dollar jacket that was on sale and you got it for say $150 how would they assess that?

Having just come back from a few days in the USA I can tell you on the whole its worth the spin over, and is generally better value all round.We are getting SHAFTED over here ! For example, was in a Tommy Hilfiger shop and they had sweaters for $45 reduced to $30 and the sales assistant nearly choked when I told him the same jumper would cost around €120 ($150) in Ireland

I also think the average punter buying a few jumpers/ pairs of jeans wouldnt get them too excited....its the people who go over and load up on electronics they'd be really after !

I got an iPod for €200 and just priced the very same one in Harvey Normans for €399!

mambo

Manny7 wrote:

EDIT: Rereading your first post, I see you mention people think they get 30% better value because the rate is 1.30. Is that the mistaken belief you have a problem with rather than the fact that exchange rate fluctuations can change the cost of something?

Exactly.

Like on the BBC TV show "Getaway" this week where the presenter said, of Canada, that "the exchange rate is always very good - £10 will buy you $20" as if that means everything is half the cost in Canada it is in the UK, which is utter bollox.

haz

mambo wrote:

Like on the BBC TV show "Getaway" this week where the presenter said, of Canada, that "the exchange rate is always very good - £10 will buy you $20" as if that means everything is half the cost in Canada it is in the UK, which is utter bollox.

You could have a 3-bedroom detached house outside St Johns, Newfoundland, for less than half the price of a smaller property here. There are some employment incentive schemes to help with relocation expenses too, if you happen to have the skills Canada is trying to attract.

scuby

bought a pair of nike runners and a pair of timberland boots in new york in november, there for a week. they were $60 each, about €48, where as the same ones here were over €100

John R

mambo wrote:

Exactly.

Like on the BBC TV show "Getaway" this week where the presenter said, of Canada, that "the exchange rate is always very good - £10 will buy you $20" as if that means everything is half the cost in Canada it is in the UK, which is utter bollox.

It is not bollox. Exchange rates can vary considerably while the price of goods and wages within each market changes far less.

The trends in exchange rates have a big effect on the buying power of individual currencies and right now the € will buy 13% more US$ than it was 1 year ago. The cost of goods in the US has risen by approx 3% in the same period so in real terms the € is worth 10% more than it was a year ago.

Right now the strong € is of benefit for consumers buying in most other markets. The only othe major currency that has been out performing it recently is the GB£.

Money is a commodity just like any other product.

link

mambo

John R wrote:

It is not bollox. Exchange rates can vary considerably while the price of goods and wages within each market changes far less.

The trends in exchange rates have a big effect on the buying power of individual currencies and right now the € will buy 13% more US$ than it was 1 year ago.

I agree, but that doesn't automatically mean that the US is better value than here. It just means it's 13% better value than a year ago.

For example, designer clothes are generally cheaper in New York, but you wouldn't go there to save money on, say, dental treatment (even though it's 13% better value than a year ago).

The TV presenter seemed to think that simply because £1 = $2, that means Canada is automatically great value. Which is bollox.

rubadub

"the exchange rate is always very good - £10 will buy you $20"

John R wrote:

It is not bollox. Exchange rates can vary considerably while the price of goods and wages within each market changes far less.

You are saying it is not bollox but then seem to agree exchange rates vary a lot so they are not "always good"

The presenter is ignorant or phrasing things wrongly.

What he should be saying is that stuff is generally cheaper there, compared to the UK, not mentioning exchange rates as this should be presumed, who gives a damn what the current exchange rate is if it is cheaper. Any comparison should be something like "an ipod costs £200 in the UK but in canada it will be about £150, depending slightly on the exchange rate at the time"

I do keep an eye on rates and do tend to buy more from the US when the exchange is good, I remember when the euro first went higher than the dollar, many US & worldwide firms were slow to realise and were still giving equal prices in € and $ since they had been making a lot doing this and it was a simple pricing structure.

mambo

haz wrote:

And the Sunday Times today (http://www.timesonline.co.uk/newspaper/0,,176-2483915,00.html) reports that returning Irish shoppers are being whalloped for the VAT when they come back through Dublin Airport - the maximum duty-free limit is 175 euro, and there is a fine if you go through the green channel.

The Sunday Business Show said cannier shoppers FedEx their booty home from New York.

Presumably if the goods are for yourself (and not gifts), and you can therefore remove all the packaging, etc, then they can't prove that you bought the goods on the trip and didn't bring them with you on the way out? (Unless you arrive back in Dublin airport with 3 suitcases of clothes after a 2-day trip to NY!)

Sizzler

mambo wrote:

Presumably if the goods are for yourself (and not gifts), and you can therefore remove all the packaging, etc, then they can't prove that you bought the goods on the trip and didn't bring them with you on the way out? (Unless you arrive back in Dublin airport with 3 suitcases of clothes after a 2-day trip to NY!)

Didnt I already say all of that earlier in the thread

Kinetic^

WTF is the OP trying to say ffs? :rolleyes:

OP, go away and think about what you're trying to say because nobody has a damn clue!!!!!!

Simon201

Dont know what the OP is on about either but I have someone getting me a little camera from NY that's gonna cost me €100 and it's €130 over here so I reckon I'm getting €130 for me €100.... oh where have I read something like that before..

and wtf has Denmark and South Korea got to do with anything?!

emeraldstar

plus who wouldn't want to go to New York? I'd sure rather go there then Denmark!!