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Save Money With Cross Border Shopping

Sept. 10, 2012
6 mins
A man and a woman walk down the street with shopping bags

Back in the 80's and 90's, cross border shopping became a bit of a sport. Our dollar was low, American taxes were minimal and the choice - oh the choice! Our southern neighbours were happy to indulge our love of cheap purchases and built outlet malls near our lengthy border and in tourist destinations.

While the dollar difference has disappeared as of late, it’s still a great deal to shop in the States. Thanks to those outlet malls, there’s a myriad of stores offering clothing, shoes, housewares and luggage at rock-bottom prices. Some of the deals are on name brands that cost as much as double here, and the rest you often can't find in Canadian stores at all.

The Best Time To Hit The Border

How about when not to go? Avoid American holidays such as Thanksgiving, and Canadian long weekends too; as the border clogs up, so do the malls. Any time in December is insane.

Use an app like BorderTimes or check the Canada Border Services Agency web site for wait times — it’s updated hourly. If you’re crossing at a busy juncture like Niagara Falls, there are a number of bridges you can pick, so research in advance to choose the one with the shortest wait. Leaving very early in the morning often helps too.

As for time of year, there are many options. U.S. retail prices are, on average 20% lower than Canadian - there are deals to be found any time of the year. Since the U.S.’s economy is not as healthy as ours of late, you can find discount rates all year as stores try to entice consumers.

The rest of the sales cycle follows what we see here: for example, at this time of year there are great back-to-school prices to be found. January and February are great for seeing just about everything in deep discount. Summer also sees great sales across the board.

Shopping while on vacation follows a similar strategy. Since it’s probably a shorter trip to the mall, you can stock up on what your needs are at the time. (For travellers to Florida, outlet malls are everywhere.) But you need to balance the deals you find with suitcase space if you’re flying.

What's Up For Grabs?

Again, retail rates are generally better in the U.S. than Canada for all goods. If you follow a premium priced brand for housewares, footwear or other categories, outlet stores for these brands will often have dramatically better prices than you can find here - plus you don’t have to wait for a sale and risk not finding your style or size.

Deals on electronics, meanwhile, can vary widely. Some goods seem to go for similar prices. While there are deep deals on things like plasma TVs, large purchases like this might not be worth it if you have to pay duty. It's also best to buy things like phones or cameras if you are staying a few days: then you can open the package and make sure the thing works. You can't return things over the border!

Overall, the best way to approach border shopping is controlled volume. Heading out now for back to school stock-up, or in mid-November for early holiday shopping is a great approach; you get a lot of stuff for a time when you have high needs.

However, the endless deals you’ll find at U.S. malls can encourage overshopping. You may end up coming up with piles of stuff from Target and the Nike store that you really don’t need. You’ll likely use debit or credit while shopping, go with a budget and keep a running total of how much you’ve spent. Once you’ve reached your cap, stop!

Discount Shopping Tips and Tricks

Be cautious about hidden expenses. Focus your trip so you’re not driving excessively and spending more on gas than you’re saving. Eating meals on the road also adds to the cost of a cross-border shop.

Many Canadian credit card companies charge an out-of-county service fee of around 2.5 percent when you shop in the U.S. Find out what your card’s features are and use debit when possible (not all US retailers accept our debit cards) or hit a U.S. bank machine and spend cash. If you plan on spending across the border often, it may also be worthwhile to look into a debit credit card - these make it possible to pay in debit over the credit card company's world-wide network, and are accepted much more widely.

Expert Tip: Don't underestimate the cost of gas when traveling over the border. If you're using a credit card to fill up, make sure it has great cash back returns for gas purchases. A great option is the MBNA Smart Cash MasterCard credit card - you'll get up to a full 5% cash back for the first six months, and 2% after that. You'll also get 1% cash back on all other purchases.

Cross the Border With Ease

Making sure your identification is in order is important in order to cross the border quickly and stress-free. All Canadians must use a valid passport to cross the border by land or air. Some border agents don’t like passports that are on the verge of expiring as well — always make sure yours is up to date and renew before it expires.

Agents like to know where you’re going and when you’re returning. If you’re staying in the U.S., be prepared to share the address (this is often a problem when you’re staying a hotel — make sure you know the exact street address as well as the name).

IMPORTANT: Keep all of your receipts and have them in hand when you cross back over the border.

Understanding Duty Rules

Good news: as of June 1, 2012, you can bring more back into Canada after a U.S. trip! The full details are listed here.

Here's the spending / visit-length breakdown:

  • If you stay longer than 24 hours, you can bring back $200 in purchases and gifts without paying any duty.
  • If you stay between 48 hours and seven days, that goes up to $800.
  • After 72 hours you get an additional $100 allowance for gifts, duty-free — but you can only use this exemption every six months.
  • If you’re just doing a day trip, there’s no personal exemption. Under 24 hours and you must pay duty on everything you buy except for a small amount of cigarettes (200) and alcohol (1 L).
  • Duty amounts vary, depending on what you buy, but it’s basically a percentage of your purchase. This is why it’s key to have your receipts on hand.

Be Honest!

It’s temping to rip tags off clothes and shoot some images on that new digital camera to avoid paying duty - but getting caught lying at the border is a serious undertaking. Not only could you lose your purchases, but you could be fined up to 80% of their value.  Plus, you’ll be stuck at the border longer and risk having your car fully searched, which border guards are perfectly within their right to do. Stressful!

Cross-border shopping is about getting deals and for some, having a fun day out or a weekend with friends or family. Make sure you do the math in advance to be sure you’re not spending more than you can afford and are truly getting a good deal for your money.

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