Why foreign consumers shop in U.S.
A Slingbox 500 streaming media device. Another device from the same company, the Slingbox 350, is now available in Mexico.
In most American towns, the price of a consumer product will vary a little bit between retailers. But between countries the price of something can vary a lot.
For example, when the Slingbox 350 goes on sale for the first time in Mexico, the device – which connects your TV with your computer and mobile gadgets – will retail for about $75 more than the same product sells for in the U.S. Why?
Some of it is stylistic. For U.S. prices, sales tax is added later. In Mexico, sales tax is already included in the price.
Another factor: there's less competition among electronics retailers in Mexico. And intense competition here in the U.S. keeps a lid on prices, to the envy of consumers everywhere.
"Growing up in England, people would regularly fund their trips to, New York say, with the purchase of a laptop computer," says David Atkin, an assistant professor of economics at Yale.
Atkin says an Apple computer can sometimes cost $500 more in the U.K. than it does in the U.S.
Price differences in other countries
We took a look at other price differences in countries around the world that have frustrated consumers with their seemingly arbitrary increases over their U.S. counterparts.
iPads in the U.K.
Our friends across the pond have been complaining about the higher prices for Apple products for a few years, especially when it came to the iPad, as U.K. customers were stuck paying around $100 more for the same product. And it doesn't look like that's changed, with the U.S. models of the iPad Air starting at $499, and the U.K. counterparts going for about $660 (converted from British pounds).
Cars and tires in Canada
Last holiday season, plenty of Canadians were looking to take advantage of the U.S.'s Black Friday sales on cars. But even during the rest of the year, price differences between U.S. and Canadian dealerships on the same models of cars ranged in the thousands of dollars. One problem though: Canadians making the trip down south were finding some dealers were refusing to sell to them. Our neighbors from the north did have better luck in another area of automotive holiday shopping, though; tires in the U.S. can sometimes cost half as much as in Canada.
Video games are getting more expensive in Canada too
Those Canucks just can't catch a break. Last month, Canadian video game retailers announced that because of the weak value of the Canadian dollar, they would be raising prices of new games for consoles by $5 to $10. But don't worry Canadian gamers, all those imitations of Flappy Bird on the app store should stay free.
It's cheaper to fly to the U.S. and back to buy Adobe's software than it is to buy it in Australia
For years, Australian professionals looking for a copy of Adobe's Creative Suite Master Collection (CS6), which includes software like Photoshop and Illustrator, had to deal with price tags that soared more than $1700 over the U.S. version. One Australian news outlet did the math, and found that an Aussie could fly from Sydney to Los Angeles, pick up a copy of CS6, fly back, and still have a couple hundred dollars left over. This caused quite a stir down under, as Australia has long dealt with what it feels are unfairly inflated prices, with lawmakres even going so far as to call executives from Adobe, Microsoft, and Apple before their Parliament to answer questions about why they charge so much more there.