Buy from the US

The turbulent world economy means the pound isn't quite as strong as it has been recently. However buying from US websites and especially while there in person can still mean good savings. This is a full guide to getting more buck for your bang, including customs duty issues and who’ll deliver to the UK.

• Is it worth buying from the US?
  
• How to pay: The cheapest and safest way
• Buy from US websites
  
• Sites that deliver to the UK
• Should I 'buy & fly'?
• Customs duty & VAT
• Returning goods bought abroad
  
• Other articles/discuss

Don't get carried away...

Is it worth buying from the US?

Until recently the US dollar was at one of its lowest, or ‘weakest’ rates against the pound in 25 years, which was great news for Brits as £1 bought around $2 of stuff. However the recent economic downturn means the pound has weakened, closing the gap slightly.

For those not steeped in the rules of currency exchange, the pound is stronger when it is able to buy MORE of a rival currency; and weaker when you get LESS. So while the pound is still stronger, it's not at its strongest.

As exchange rates fluctuate every day, the daily updated Dollar-o-meter shows you today's realistic rate; if it’s anywhere above $1.80 per pound (see the Dollar-o-meter above for the latest) it means the pound is very strong. As the huge bulk-buying power of the US market means things are often cheaper there anyway, when the pound’s strong it's worth checking to see if buying there rather than here will save you cash.

The 'should I buy from overseas' quick checklist

Don’t jump straight in… A cheaper list price doesn’t always make it cheaper in the end…

First check the cheapest UK provider.

First find out the best price available in the UK. The easiest way is to use a shopbot (shopping comparison service) like Kelkoo*, Pricerunner* or Shopping.com* which’ll find the cheapest deal for you; read the Cheapest Online Shopping article for the full info.

Then find the US price and add 30%.

An easy rule of thumb is that the charges for delivery, customs and VAT will add around 30% to the list price of the US goods. Therefore only if this is still cheaper than the UK price, is it worth spending more time looking into it; otherwise stick with the UK.

Don’t forget other countries.

You can also benefit from the weak dollar in countries whose currency is linked to it. The Hong Kong dollar is pegged on the US dollar, meaning when the US dollar’s weak, it’s weak too. Buying there has an extra advantage for electrical goods, as they use the same plugs as the UK, so you won’t need an adaptor.

There’s an environmental cost to buying from abroad.

Importing leaves a carbon footprint. It’s a personal judgement call as to whether the amount you’ll save balances out the environmental damage. Yet at the very least, if there’s very little in the price, you should choose the closest option.

Are the goods UK compatible?

Just as crisps are called chips and jam is called jelly, there are a few other things in the US that mean something completely different to us Brits, so remember these useful points to avoid making useless purchases:

Electricals.

The US has a different plug and voltage system, so you’ll have to incorporate the cost of a transformer and converter plug into the price. The one exception is laptops which tend to include multi-volt transformers so they can be used anywhere (with a converter plug).

Clothing sizes.

Both shoe size and dress size differ to UK sizes. Use an Online Converter to check before you buy.

DVD regions.

Most DVD players and DVDs are ‘region protected’, meaning they'll only work in specific regions. Europe is one region and the US another, so if you're buying US DVDs make sure you’ve a multi-region player or at least a player that can be legally hacked to be multi-region (see the Techie Stuff board in the Forum for more info).

Language settings.

Think about whether you’re happy with US English software and spellings.

How to pay: The cheapest & safest way

If you’re going to buy from abroad, for both cost and safety credit cards surprisingly win. Though this only applies if you pay the card off in full at the end of the month, otherwise you’ll pay interest, defeating any benefit.

Buying on a credit card for safety

Buy £100-plus goods on a credit card, and you get an extra consumer protection that doesn’t apply for spending with debit cards, Paypal, cash, prepaid cards or travellers cheques.

It’s known as ‘Section 75’ and means for purchases between £100 and £30,000, in the UK or overseas, online or in person, the credit card company is equally liable with the retailer if things go wrong. This is great protection for buying from abroad as it means rather than having logistical difficulties dealing with an overseas company you can go straight to your credit card provider instead (see the Section 75 article for more info)

Worried about applying for new cards?

If you don’t want to apply for new credit or debit cards, don’t just use whatever you already have; they’re likely to be expensive. Using a prepaid card is a good alternative; you ‘top-up’ cash onto them, then you can spend that amount when shopping with it.

Travelex’s Cash Passport has no application charge, and you can top up online (or at Travelex stores) for free. Also, it’ll cost you nothing to use the card for spending, a common fee on other prepaid cards. I’m writing a full guide to all the pros and cons of prepaid cards, and it’ll be published soon – keep your eyes out in the free weekly e-mail.

Get the best exchange rate

If you’re trying to take advantage of the strong pound, wasting chunks on expensive currency conversion charges are pointless.

The cheapest way to buy abroad/from an overseas website.

The top consumer exchange rate out there is the one Visa and Mastercard charge the banks; sadly most banks then add a whack onto the rate they charge us; with the big exception of the Post Office* credit card and the Nationwide debit and credit cards.

This makes them by far the cheapest way to spend in dollars, saving you up to 6% over other methods. So grab one of these cards specifically for when you go abroad or spend in a foreign currency.

If you don’t already have one, read the full Cheapest Way To Spend Overseas article to find the cheapest.

Never pay in pounds when abroad/on an overseas website.

If you're buying from a US site that offers you the option of converting to pounds, don't bother. This means you’re dependent on the exchange rate it gives you, which is normally poor as they make an extra cut of the currency conversion. So provided you’ve got one of the good cards above, simply pay in dollars and you know you’re getting the best rate.

Buy from US websites

The easiest way to take advantage of the strong pound is simply buying from a US website and getting the goods delivered to the UK. Even so, don’t think you’ll just rely on the listed price as import duty and VAT can add around 30% to the price (see later).

Finding the cheapest goods in the US

The States has its own shopbots (shopping comparison sites), and these will give you a good benchmark of the cheapest prices. Some of the best known include Pricecomparison.com, Aimlower and Smarter.com

Cheap shipping and delivery

There are a number of ways to keep shipping costs down:

Ask a friend/relative in the US to hold the item for you.

If you can, have your purchase shipped to friends/family in the US; and then either have them hold onto it until you visit or send it on. Even better, if it costs under £36, and you know them well enough, ask them to buy it for you as a gift, which saves the VAT.

Buy in bulk with friends.

Team up with friends to make purchases and you can cut the cost of shipping. However, if what you're buying costs less than £105 go solo otherwise you may have to pay customs charges which will far outweigh the shipping in most cases.

Use a site which offers UK delivery

The following US retailers come from MoneySavers suggestions of the best US retailers to buy from in the Great Buy in the US hunt (if you know more please add them there), and all can sometimes deliver to the UK. Also read the Cheapest Contact Lenses article for details on how to buy them Stateside.

If companies refuse to ship goods across ‘the pond’, you can use a mail forwarding service. Simply sign up for an account and they provide you with a US address which you can have goods shipped to. They will then forward these on to any address in the UK that you like.

Obviously they charge a fee for doing this - which may dwarf any savings on the purchase; so carefully calculate the cost first. Firms include Mail Forwarding, MyUS, Borderlinx, International Checkout and MyUSPostBox; they should also detail the legal niceties.

Should I do a 'buy & fly' holiday?

The obvious fast-track solution to cheap prices in the US is to take a trip and buy yourself. As a rough rule of thumb, for each £1,500 you spend, the savings should pay for a flight to New York or Miami. This has the added bonus that while the pound is strong, the cost of staying and eating in the US is cheap too.

Top tips for shopping across the pond

First read Cheapest Flights followed by the Cheap Hotels article to ensure you keep the cost of your trip right down. Provided you get a get a reasonable deal on flights and accommodation, the savings made from bulk purchase shopping should more than cover the price of the holiday.

You can only bring £145 worth of goods back.

The European Union (EU) has set a goods allowance of £320 (excluding tobacco and alcohol), on bringing items back to the UK from countries outside the EU. Above this and you’ll need to declare the goods at the airport and pay customs duty; an amount that varies depending on the item, how much it costs and what it’s made from, as well as VAT at 15%. Of course, some people just walk though the ‘nothing to declare’ exit and get away with it; yet doing this is illegal and can land you a hefty fine if you’re caught, so don’t.

Sales tax.

When goods are priced in the States, it doesn’t include ‘sales tax’, their equivalent of VAT. Yet unlike in the UK, the price tags exclude the tax, and it's only added when you get to the till; so things are a little more expensive than you’ll think. Five US states don't charge this tax; Alaska, Delaware, Montana, New Hampshire and Oregon; so shopping there can be cheaper.

Scout around for extra tourist discounts.

Tourist shopping is big business in the states; savvy retailers have cottoned on to the fact big bucks can be made and therefore you may be able to pick up extra discounts. Department stores like Macy's and Bloomingdale's sometimes offer a further 10% off on production of your passport. Check with customer services wherever you're shopping to check for similar offers.

Beware of baggage allowances.

Baggage allowances tend to be around 46kg and extra bags can cost as much as £120. If you know you're going to go over the limit book your extra baggage allowance online as you can usually get a discount rather than getting stung at the check-in desk. Don't forget to factor in this cost when buying big purchases.

Ask your friends if they need anything.

If you’re going on a shopping trip, ask friends if they need anything, and then ask them to contribute a cut of the savings to help fund your trip.

What to buy

Visit outlet stores

Outlet stores are shopping centres filled with the manufacturer’s own shops. It’s a route for selling stock (sometimes slightly older) at a very cheap price. Therefore you get double whammy; the cheap price in a cheap currency, which can amount to a quarter of the UK cost for some goods. See a full list of outlet stores

Customs duty and VAT

Bringing goods back into this country doesn’t come cheap. This is crucial to take notice of, as it can send the cost of your goods sky-high – and swallow up all the savings secured elsewhere. Here are the import charges that will hike up the cost of your steals from the US.

Customs duty.

Customs duty is a tax on imports, for which goods coming into the UK from non-EU countries are eligible. You'll only be charged this for items which cost more than £105. The amount of the duty depends on the category of goods; some electrical items, for example, digital cameras, laptops, mobiles and games consoles like Wii/ Xbox360 are duty free. A full categorised list is available at HMRC site.

For expensive items, get an estimate of customs prices by calling HM Revenue & Customs’ National Advice Service directly on 0845 010 9000 or, if calling from abroad, +44 (0) 208 929 0152.

Import VAT on goods over £18.

Separate to customs duty you’ll also need to cough up 15% on goods costing £18 and more (including shipping charges), or if you can prove the item’s a gift, the threshold's £36. It’s important to understand the VAT is on the full amount, not just the excess over the limit.

HMRC deems it a gift if: it's from an individual to an individual, is for the private use of you or your family, there is no commercial or trade element and the gift has not been paid for either directly or indirectly.

Customs clearance charges.

When shopping online from the UK, if there are duty and/or VAT charges, the delivery company will pay this on your behalf and reclaim the funds from you before delivering your parcel, plus charge a handling fee on top. Fees vary depending on the company; but usually are between £8 and £14. These can be charged at a later date so watch out and be careful.

Returning goods bought abroad

Did you buy it on a credit-card?

As mentioned earlier, if you bought it on a credit card and it cost over £100 the credit card company is equally liable with the retailer; so if you’ve got problems go direct to it.

Is it a chain/brand with outlets in the UK?

If you’re buying a well-known item, it’s worth finding out whether it could be replaced in the same store in the UK; or in a similar store that is owned by a US parent.

Do you have a warranty?

Also check the warranty you get with the product, especially for electricals and watches. The warranty may mean you can get it fixed here for free, particularly if it’s a big brand.