Hidden dangers of overseas Black Friday sales
Bargain hunters trying to find a better price from overseas Black Friday sales may not be getting such a great deal, experts warned.
Freight-forwarding services such as MyUS, Shipito, USA2ME, US to OZ and Big Apple Buddy have seen a surge in popularity because they let customers buy from overseas websites that do not ship to Australia - giving them access to potentially cheaper prices and a wider range of products.
Australia Post has its own freight-forwarding service - ShopMate - which has seen 15 per cent annual growth over the past three years.
ShopMate last year forwarded $9.67m worth of American goods into the country.
Got your eye on something in the #BlackFriday sales, but they only ship to the US? We've got you! With ShopMate, we'll give you a US Postal Address that you can use to shop the sales, and ship all your goodies back home to Australia! Find out more at https://t.co/vedf1V2bbI pic.twitter.com/yemULE21wm— Australia Post (@auspost) November 25, 2019
With Australians expected to spend $53 billion in the lead up to Christmas, freight-forwarding services have been marketing themselves to customers as a way of grabbing an even better deal.
But while overseas markets may sell different products or offer them at a cheaper price, consumer finance expert Lisa Montgomery urged shoppers to think twice before spending with these foreign retailers.
"It's really important to do your research on brands and buy from a retailer with credibility," she said.
"Know the product you're buying, know its price and look at the conversion rate if shown in a different currency.
"Check to make sure you're actually getting a good deal and there are no additional fees. It's very important to read the fine print too and check whether you have the option of returning what you buy.
"I think people can get too caught up in the moment and frenzy, and may buy things that aren't that great of a deal or that they don't need."
Many brands do not ship internationally from the US including Adidas, Billabong, Skullcandy, Apple, Nike, Old Navy Vans and Walmart.
While some have Australian stores, the range of products and deals available can differ.
At first glance, these appears to be a bargain for shoppers.
Ms Montgomery warned that shoppers need to be mindful of the shipping costs involved, if any, as well as conversion rates of the currency they are shopping in and added GST.
Since July last year, a goods and services tax of 10 per cent applies to all products bought overseas, even on items worth less than $1000.
On the US Nike website, the Airforce 1 Mid By You shoe is listed for US$115 - compared to $180 in Australia.
But after currency conversion and GST, this price blows out to more than $185 for Australians.
Then shoppers have to add on the cost of freight-forwarding services like ShopMate, which charges on the parcel's weight and dimensions.
ShopMate charges a $A25.25 base shipping rate per parcel, plus $A5.45 weight rate per 500g.
But that is not to say a bargain cannot be found.
Skullcandy wireless headphones - selling for $299.95 in Australia - are available for $99.99 ($A147.52) online in the US.
Ms Montgomery said the most popular big ticket items included AirPods, Dysons and game consuls, as well as other items priced between $500 and $1500.
She added online and broad shopping was particularly popular among young people.
However, older consumers sway towards seeing the item first-hand before making a purchase either in-store or online.
"Certain demographics, who really look for particular items not available in Australia, take advantage of Black Friday to purchase what they want … because not only will they get something that's not available on home soil but they'll get it at a discount price," she said.
The latest research from Vend and YouGov has found 63 per cent of Australians plan to shop at independent stores this Black Friday.
In 2018, shoppers spent more than $10.6 million in stores across the nation - 16 per cent more than what was spent in 2017.
ShopMate's international product specialist Lucy Watson-Jones said fashion and accessories was the biggest hit among customers.
Ms Watson-Jones added the biggest challenge faced at ShopMate was the lack of understanding on how the service works among customers, and where it fits into a transaction.
"The first interaction shoppers have in buying a product in the US is with the merchant," she said.
"Until it arrives at the ShopMate address in the US we are unable to see the order.
"ShopMate is not part of the initial transaction so it can get tricky if items are delayed, damaged or don't arrive."
Australian Retail Association executive director Russell Zimmerman added Australian consumers were estimated to spend more than $7.6 billion in the "Other Retailing" category, which includes online sales - representing a 3.7 per cent increase compared to last year's festive season.
"In 2018, Black Friday and Cyber Monday brought spending forward, as the week following the sales saw more products delivered than the first week of December, the usual online shopping peak," he said.
"Australians are already searching for this year's Black Friday event, according to Google Trends, after 'Black Friday' searches soared by 50 per cent from 2017 to 2018."
According to Australia Post, fashion accounted for 27 per cent of all online purchases in 2018, while beauty and cosmetic products had a huge boost during Black Friday and Cyber Monday.
"Many Australians are no longer waiting until Boxing Day for a bargain, while many have written their lists early and jumped online in search of the perfect gift to make a very Merry Christmas," Mr Zimmerman said.