Extra charges, fees mean online shopping not always a moneysaver

VANCOUVER – Holiday shoppers looking for online bargains are being warned that extra charges and hidden fees can turn that great deal into a dud.

The Internet continues to become a more important part of Canadians’ holiday shopping, with web browsers and even cellphones replacing malls as buyers hunt for bargains, particularly from companies based in the United States.

But consumer advocates and government agencies urge shoppers to scrutinize their purchases carefully for fees and shipping charges that can be added even after they’ve paid. And they also remind Canadians that laws designed to protect them may not apply to online retailers located in other countries.

Most agree that the best way to avoid any surprises is to check the fine print – all of it.

It’s a tired refrain consumers have heard since before the Internet existed but evidence suggests it’s still seldom heeded as buyers blaze through online forms and checkout pages, sometimes without even noting the final price before they click “purchase.”

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“There’s this instinct to click the ‘I agree’ box but we recommend people look at what’s inside there, so that they’re making an informed decision,” says Tatiana Chabeaux-Smith of Consumer Protection B.C., an arm’s-length agency that helps enforce consumer laws.

“Just think about all the things that might factor into your decision and ask yourself, ‘Is it actually cheaper?”

Chabeaux-Smith says when a customer stumbles upon what looks like a great deal, taxes, shipping fees, customs charges and exchange rates can quickly add up, making the final price a lot higher.

Often when a consumer pays extra fees they’ve already agreed to them, whether they know it or not, but that doesn’t make them any happier once they realize what they’ve done.

Witness the perennial rage directed at Greyhound, which adds an $18 “gift fee” to any ticket purchased online for another person.

The policy has prompted online petitions that have garnered thousands of signatures, Facebook pages denouncing the company and yearly news stories featuring angry customers.

Greyhound insists the fees are required to combat credit-card fraud and to hold tickets for pick-up. Company spokesman Timothy Stokes says there are no plans to reconsider the fee.

Ken Whitehurst of the Consumers Council of Canada is well-acquainted with the issue.

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“We find that incredible,” says Whitehurst. “People purchase airline tickets for other people all the time. It’s hard to imagine a really good reason for that surcharge.”

On the other hand, the fees are plainly listed before users reach the online checkout. The same can often be said for charges such as travel insurance, shipping costs and gift-card fees that can pop up on some online purchases, and Whitehurst says it’s up to consumers to look for them.

Something that often isn’t listed are the customs and brokerage fees charged by the federal government and courier companies when items cross the border. In many cases, consumers aren’t asked to pay until the package shows up at their door.

It can be nearly impossible to predict what those fees will be in advance, says Whitehurst.Courier companies each charge different rates for their brokerage fees and some packages, inexplicably, end up crossing the order without any fees at all. The actual duty can change depending on where a product was made.

“That’s very complex to keep up with,” says Whitehurst.”It’s pretty complicated to compare prices where duty applies across the border.”

Consumers also can run into problems if they assume local laws will apply to purchases made at retailers in other jurisdictions.

Many provinces prohibit retailers from charging fees or imposing expiry dates on gift cards, although laws vary. They also don’t cover credit-card themed gift cards, which almost always carry activation fees and so-called “maintenance fees” that diminish a card’s value over time.

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But, if you’re dealing with a U.S. retailer or one in another country, there’s no guarantee they follow the same gift-card rules. The same goes for any local laws that govern return policies and warranties.

“Certainly, potentially, it’s much more complicated, depending on the quality of the retailer,” says Whitehurst.

Lisa Campbell of the Competition Bureau of Canada offers the same common-sense tips for avoiding getting dinged with unexpected fees, and she says they will also help consumers avoid being the victims of fraudsters.

Despite regular news coverage of online scams, Campbell says online retail fraud continues to increase.

The bureau estimates mass-market fraud that includes telephone, mail and online fraud is costs Canadians about $10-billion a year. The agency doesn’t know how much is related to the Internet alone.

“It’s not just people who are unsophisticated shoppers who get duped,” says Campbell.

“Very sophisticated shoppers and even people who are quite literate online can get duped by these scams because many look like they’re coming from a trusted source.”

She says any customer who believes they’ve been the victim of fraud or deceptive marketing online should contact the bureau.

“Our legislation applies to retailers in Canada, but it also applies to retailers outside Canada who target Canadians; if someone is trying to sell things to Canada, we will take action,” she says.


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