Aussies ripped off by retailers – Report from the net

Global companies with a presence in Australia prevent local customers from taking advantage of cheaper prices offered on their overseas websites, consumer group Choice says.

In its submission to the Productivity Commission’s retail inquiry, Choice says Australian retailers must explain why they charge huge mark-ups on products that cost half as much from overseas internet companies.

A strong Australian dollar should enable local retailers to pass on savings to their customers, Choice said.

It has found that a pair of Nike running shoes costs $240 at a major Australian sports retailer while consumers can buy the same shoes for $134 from an online store based in the US.

The Choice report follows one by the Australia Institute this week, which compared the perception by consumers of retailer mark-ups and the reality. The difference between wholesale and retail prices was narrower for industries where online retailing was more active.

Choice said the top 12 music albums cost 73 per cent more if purchased from the Australia iTunes store than the US iTunes store.

But Australians are barred from using US iTunes.

The popular video game Portal 2 for Xbox 360 and PlayStation 3 costs 91 per cent more from a major Australian online retailer than from a website based in Asia.

“There are too many examples, from white goods to motorcycles and TVs to video games, where we pay more,” Choice campaigns director Christopher Zinn said in a statement.

“It’s up to those in the supply chain here in Australia to justify why this is the case.

“Importers and retailers should not cry foul if consumers chase better prices, wherever they may be.”

Last December, big retailers such as Harvey Norman, Borders, Target and David Jones waged a campaign against the $1000 GST-free threshold for retail products purchased overseas.

They labelled it unfair and argued it would cost jobs.

The National Retail Association representing 3700 small shops followed suit.

The debate urged the federal government to announce a Productivity Commission inquiry into the future of Australia’s retail industry.

Choice said overseas retailers offered better prices, better service and a much larger range of products.

Eliminating the GST-free threshold would do nothing to dissuade Australian customers from continuing to enjoy big savings from buying online, it said.

Choice also attacked global retailers with a presence in Australia for preventing the use of Australian credit cards on their overseas sites.

“We are challenging global corporations to drop the artificial technological barriers used to block competitive prices online, such as those affecting software and music downloads,” Mr Zinn said.

“There is no reason why Australians should pay more than consumers in comparable countries for digitally delivered items like software.”

The Productivity Commission has been asked to report on the current structure, performance and efficiency of the retail sector and the broader issues contributing to the increase in online purchasing by Australian consumers.

AAP
Read more: http://www.theage.com.au/business/aussies-ripped-off-by-retailers-choice-20110527-1f72l.html#ixzz1vbgZweTI

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