Border line bargains
Images of Canadians swarming a Bellingham Costco and scooping up milk jugs gave a couple of local graphic designers an idea.
Dan MacClure and business partner Jay McMahon of Richmond-based Creative Apparatus designed red-and-white T-shirts emblazoned with the words “Milk Piranha.” It was their response to an anti-Canadian-shopper Facebook page that popped up last year, in which the term was used to describe milk-thirsty Canadians.
“Overall the reaction to the Milk Piranha T-shirts was amazing,” said MacClure. “People got the humour and surprisingly the majority of our sales were to U.S. customers.”
Now some of the millions of Canadian consumers who cross the border each year can wear the tongue-and-cheek shirt when hunting for bargains. But when it comes to deals down south, there is often more than meets the eye.
Border delays and hassles, high gas prices, passport and identification requirements and warranty issues can often be overlooked. Possible duty fees at the border and state sales tax at the American register can further add to the cost of a bargain.
There is also the hidden cost of the impact to the local economy.
“It makes a huge difference when individuals spend their money locally because those dollars create local jobs and support local business which benefits the entire community,” said Barry Grabowski, chair of the Richmond Chamber of Commerce.
A 2012 report from BMO Capital Markets noted there are over 50 million visits to the U.S. by Canadian residents each year—about one-and-a-half visits for every Canadian.
Record numbers of Canadians are heading south, lured across the line by everything from food and clothing to electronics and vehicles. But with big-ticket items, warranty coverage is not a sure thing in Canada.
According to the Canadian Automobile Dealers Association, warranties of vehicles purchased in the U.S. are often not valid in Canada. Some brands do cover some warranty issues of American cars in Canada, but free scheduled service or maintenance packages might not be valid here.
The Bank of Canada suggests that cross-border shopping accounts for less than two per cent of consumer spending, but the BMO report suggests the number could be as high as 10 per cent.
Nonetheless, the BMO report suggests, Canadians are seeing the price gap drop between American and Canadian goods. The bank’s random sample of goods found Canadian retail prices were 14 per cent higher in 2012 than in the U.S.—down from the previous year’s differential of 20 per cent. But that figure doesn’t include costs of duty and transportation.
“We also found that a previously enormous price spread in one specific item (gas barbecues) has all but vanished on price reductions in Canada,” says the report, which notes barbecues were actually two per cent less expensive in Canada at the time of the survey. “However, the unusual differential on running shoes, highlighted last year, persists.”
Whether they’ll save money or not, Canadians can still cross the line in style by ordering a Milk Piranha T-shirt or bumper sticker of their own through the Creative Apparatus website.
Said Dan MacClure: “We’ve had sales all across the U.S. and Canada – from Oregon to New York and from Victoria to Montreal. We also sold a few to the UK – crazy.”