New duty-free limits now in effect
Posted June 1, 2012 12:58 pm.
This article is more than 5 years old.
PEACE ARCH (NEWS1130) – You can now spend more money in the States without paying more duty.
The next time you stay in the US for 24 hours, you can spend $200 without paying duty. If you’re in the States for 48 hours, the duty-free allowance is now $800.
It certainly makes it more attractive for Canadians to head stateside to shop. So, what can BC businesses can do to keep you shopping at home?
In many cases, lowering prices is not an option, according to James Brander with the Sauder School of Business.
He says if you can’t compete with stores like Walmart, you need to stop trying. “What you need to do is offer a different product that provides more service, that’s pleasant to shop in [or] maybe has a slightly different selection of goods.”
“You need to find your niche, and your niche cannot be competing with the big box retailers. Your niche has to be something that only you can provide well.”
“The actual model in Canada is a bit different. Retail prices are a bit higher in Canada, but average service levels are higher, and it does seem Canadian consumers, on average, do prefer a more service-oriented, more pleasant environment to shop in,” he tells us.
He adds special offers can hook people in, but you need to continually re-invent your service model to keep people coming back for more.
Brander figures a lot of people will cross over to take advantage of the next exemptions, at least for the first few weeks, but it could taper off after that.
Washington State businesses excited about the changes
“I would say we’ll probably get the same number of people, but they’ll be spending more here,” predicts Jody, who owns a shoe store south of the line.
“The biggest problem with Canadian shoppers is they have the limited amount that they can buy. With the new changes, I think they’ll be buying more,” she explains.
Angela owns a chocolate store in the States. She thinks she’ll see a jump in her profits.
“Eighty per cent of our entire gross for the whole year comes from Canadian shoppers. If you were to talk to mall management here, they actually go around and get statistics. They can probably boast 80 per cent, if not more,” she tells us.
She adds if it wasn’t for BC travellers, she’d be out of business.
