Hello again and welcome to the On the Money newsletter. This week we are looking at the pros and cons of doing your Christmas shopping online.
Over the next three or four weeks Ireland’s delivery drivers will be run ragged dropping off millions of packages worth hundreds of millions of euro at the doors of consumers from Donegal to Dingle.
Most of the deliveries will be processed correctly and will arrive safely and promptly. They will also be what they are supposed to be when they are opened and there won’t be any unpleasant tax surprises attached to the deliveries.
But with Irish people set to shop online in record breaking numbers this Christmas, there will inevitably be many people who end up wondering if the shift to online shopping was worth it. There will be many others who will end up being ripped off or let down or facing less than jolly tax bills.
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Almost eight in 10 people with an internet connection shopped online last year according to figures from the Central Statistics Office with the percentage climbing to over 90 per cent in households with young children.
It is easy to see the appeal. The choices we have are virtually limitless in the online world and there is real value to be found. It is hassle free and can be done from the comfort of your couch or bed and, as long as you do it in plenty of time for Christmas, you won’t find yourself stressing about whether or not the perfect gift will find its way under your tree ahead of the big day.
According to research from AIB, Irish shoppers are likely to break previous records for online spending this weekend.
On Black Friday last year €105 million was spent by Irish shoppers on almost 1 million transactions. The day saw €4.3 million spent every hour, €73,000 every minute or €1,200 every second, with the busiest hours for spend between 10am and 11am and over 57,000 transactions in that hour.
Many estimates point to this year being even busier which means that in the time it take you to read this sentence, Irish consumers will have spent just over €20,000.
The good news is that consumers have far more rights when it comes to shopping online than they do when shopping in person.
They can return products for any reason whatsoever, a right people do not have if they spend their money in physical stores although the online shoppers do have to post the products back and sometimes incur costs when they do so.
That, as anyone who has ever had to do it, can be a real hassle. But returns are not the only delivery issue we are facing.
As the numbers shopping online grow so to do the demands on delivery companies and delivery drivers.
On a busy day – and every day between now and Christmas Eve will be a busy day – they are working from dawn to dusk (and often far beyond dusk) and will be expected to deliver a huge volume of boxes.
That goes someway towards explaining why some drivers don’t have the time to wait for you to answer the door so they will knock and leave the parcel at the doorstep. That is grand if you answer just as they drive away. It is not so grand if you are not at home.
In the recent past we have documented how enthusiastic dogs have wolfed down clothes left in gardens and highlighted how expensive technology in “steal me” boxes has been left on the street for all the world to see.
Books, art and other gifts have been left by delivery drivers in wheelie bins – to keep them dry – which is all well and good unless the recipient does not know it has happened, and they leave the bins – with the deliveries – out for collection.
We have heard from many readers over may months who have seen parcels go missing. They do, however, at least have some redress.
Ultimately, a shopper’s contract is with the retailer and if they pay for a product that does not arrive or is destroyed by weather or eaten by a dog after being left outside, the consumer has the right to a replacement or a refund. The retailer can then pursue the delivery company.
Surprise taxes and charges
But the odd delivery issue aside, there will be other things online shoppers will have to contend with that can be equally, if not more, problematic.
Surprise taxes and charges are up there with the worst of them.
Many websites attractive to Irish consumers are based in Britain and once it left the EU, a whole new tax regime kicked in as our friend across the Irish Sea became known as a Third Country which, in tax terms, put it on a par with China, South Africa and Argentina.
By now, the majority of larger British based companies take tax changes into account in the price Irish shoppers pay at the checkout online.
Smaller operators, however, might not be as tax efficient and that is leading to some hefty pre-delivery tax demands.
Irish VAT applies to goods from third country retailers if it costs more than €22. Customs fees apply to purchases of more than €150. There is also an administrative fee charge by delivery companies with all the additions often taking the gloss off overseas purchases.
It is worth noting that the €150 threshold under which items can be bought duty free, could soon be abolished as the EU is keen to impose customs duties on cheap goods bought from Chinese online retailers including Temu and Shein in an effort to stem a surge in what the EU sees as unfair competition.
Last year, 2.3 billion items below the duty-free €150 threshold were imported into the EU, according to the commission.
There is also likely to be some confusion caused by companies based in other countries using websites with .ie domains.
Up to 10 per cent of the .ie domains is registered to an overseas owner, with businesses based in Britain being the most likely to seek such an address.
And then there are scams. One fairly new one to watch out for – one that is linked to the .ie issue we have just mentioned – sees ads for websites promising heavily discounted clothes and accessories popping up on people’s social media feeds.
The ads take users to websites which look like they are Irish retailers, JohnnysJeansGalway.ie, for example (we checked and there is no such site but if you are called Johnny and you are selling jeans in Galway we can only apologise).
These sites make all sorts of promises about sales and the like but the products – if they arrive at all – will not be what the shopper thought they were going to be and they will have come from far, far away leaving the customer with virtually no right to redress.
Then, of course, there will be the waves of spam calls and texts that claiming people have charges due to An Post, UPS, DHL or the likes to free up delivery of a parcel.
All if this is not to say online is bad – it is great but people need to shop carefully and be aware of the consequences of their spending decisions now and in the future. And, as ever, it is always a good idea to shop local.
According to a report from Guaranteed Irish, every €20 spent with an Irish company is worth €30 to the local economy. If the money is spent with a giant multinational based in Swindon or Shanghai it is just hoovered out of the country never to be seen again.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter on the financial supports available for carers, you can read it here.
