International Ecommerce Tips
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21 Secrets for International Online Shopping

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International Ecommerce Tips
PeopleImages/istockphoto

Border Bargains

Cross-border shopping has long been a rite of passage in Canada, but online shopping also has U.S. consumers increasingly looking for bargains abroad. According to a 2018 survey by PayPal and Ipsos, about a third of U.S. consumers have made online purchases from other countries, looking not only for better prices but also products that aren't available in the United States. According to a 2018 article in The Atlantic, some experts think sites like Wish.com — which offers deeply discounted goods shipped from China — "represent the future of shopping." It seems the lure of $2 pillows, a $3 pineapple corer, and an $11 garden hose is just too much to resist for some bargain hunters. While cross-border online shopping is a common practice, U.S. Customs and Border Protection and retail experts warn it isn't necessarily simple. So, if international ecommerce is singing its siren song of savings to you, here's how to shop foreign websites without running afoul of regulations and scams.

Take It All In
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Take It All In

There's a lot to sift through when shopping foreign sites — and we mean a lot. For a prime example, take a look at Wish.com's homepage. It features everything from essentials to things you never even knew existed, including a "bowl" you can wear to catch falling tresses while getting your hair trimmed. According to the PayPal and Ipsos survey, U.S. shoppers who buy from sites based abroad are looking mostly for apparel and accessories (68%), consumer electronics (53%), toys (53%), and jewelry (51%).

See What's Banned
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See What's Banned

As U.S. Customs and Border Protection points out, "When goods move from any foreign country to the United States, they are being IMPORTED." That means they are covered under the same rules as commercially imported goods and face the same customs restrictions you'd find if you were taking them home with you on a flight. The CBP's lengthy list of restricted items includes obvious entries like drugs, firearms, and merchandise from embargoed countries — like Cuban cigars, for example. But it also includes foods (such as unpasteurized cheese, many fruits and vegetables, and most meats), soil, and some plants and seeds.

Shop for Personal Use
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Shop for Personal Use

Customs isn't going to have a problem with you bringing in clothing, sheets, towels, and other linen products if it looks like your purchases are limited to one person's use. If you buy in bulk and it looks as if you may be importing these items for commercial gain, then you're going to run into problems. Whatever discount you may receive on shipping for buying everything at once is going to be outweighed by either the paperwork for commercial import, the fine, or the outright seizure of your purchases.

Pay the Duty
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Pay the Duty

No matter what a seller says, you're ultimately on the hook for paying duties on anything you import, according to CBP. Shipping services will give you an estimate, but only customs officials know what the duties will be, and they won't be covered by shipping and handling. Sellers can often bill a customer for duty, the CBP merchandise processing fee, and "customs fees," which are charges for the services of the broker who clears your goods through CBP, if such a service is necessary. So, keep all of that in mind when factoring the final cost of your item. Also, use a duty calculator whenever possible to help determine the price.

Or Not
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... or Not

Back in 2016, CBP raised the amount U.S. consumers could spend on goods from foreign sites — known as the de minimis exemption — without incurring duty to $800 a day from $200, which saves cross-border shoppers a lot of money. The duties for cart totals exceeding the prior de minimis of $200 used to average 33% of the purchase price, and were as high as 110% for items like costume jewelry.

Watch Foreign Transaction Fees
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Watch Foreign Transaction Fees

Yes, if you buy an item from a website in another country, your credit card company can charge you a foreign transaction fee. Those fees even apply to foreign sellers on U.S. websites like Amazon and eBay — that is, if your card company doesn't decline the transaction, mistaking it for potential fraud. How do you get around it? Use a card with no foreign transaction fees, and report your cross-border shopping activity to your credit card company ahead of time.

Don't Convert Currency
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Don't Convert Currency

Dynamic currency conversion is an outright trap. A foreign retailer will offer to process your transaction in U.S. dollars, but will charge you a conversion fee for their trouble. You credit card already has a far lower conversion rate, and there are a bunch of online currency conversion calculators out there.

Take Conversion Rates as Suggestions
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Take Conversion Rates as Suggestions

Nathan Amery, site manager for U.K.-based eyewear commerce sites Pretavoir.co.uk and GlassesNow.co.uk, notes that currency conversion rates on foreign websites don't always indicate the price you'll pay. The site is using one conversion rate, but your credit card may be using another. Similarly, with PayPal, Apple Pay, or any other wallet service, you'll see a conversion rate that serves as a guideline for what you'll actually pay. "Barring any major currency fluctuations, it should be pretty close," Amery says.

Mind Your Shipping
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Mind Your Shipping

CBP notes that how you pay duty depends on how your goods were shipped. If you used the International Postal Service, you'll have to both pay the carrier and go to the local post office to pay any duty and processing fees owed. If you used UPS, FedEx, DHL, or any other shipping service, they'll bill you for the duty they paid on your behalf. If you used a freight service, you'll be billed for both the duty owed and for the services of a customs broker. The CBP website recommends that you and the seller of your goods agree on which of the three methods will be used, cautioning that, "if you're not careful, transportation and handling costs could far outweigh the cost of your purchase."

Read Auction Rules
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Read Auction Rules

Most items bought at an online auction have a duty rate of $0. However, customs often charges a small processing fee for mail imports that require a duty. A courier or express service will bill you for that as part of your shipping cost, while items sent by freight will require you to either make forwarding plans with the seller or pick up items at the port yourself, or with the help of a customs broker.

Fill Out a Customs Form
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Fill Out a Customs Form

When completing your transaction, ask the seller to provide a customs declaration on the outside of your package. Be sure to specify the seller's name and address, a product description in English, a product quantity, the purchase price in U.S. dollars, the item weight, and the country of origin.

Get the Classification Number Right
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Get the Classification Number Right

"The Harmonized Tariff Schedule of the United States (HTSUS) lists classification numbers for every conceivable item under the sun," CBP notes. "The HTSUS is the size of an unabridged dictionary, and specialists train for months to learn how to correctly classify goods." That number determines an item's duty rate and eligibility for special import programs like the North American Free Trade Agreement (NAFTA). Getting it wrong can result in fines and/or delivery delays, so contact an import specialist at your local port if you have doubts about the number you're seeing.

That said, if your imported items are valued at less than $2,500, shipped by mail or freight, and you haven't ordered them for commercial purposes, you shouldn't have to worry: In most cases they are cleared as an "informal entry," which means CBP will prepare the paperwork, including determining the classification number and duty rate for your merchandise."

Expect Delays
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Expect Delays

"That artisan cheese from Italy may be a snap to find and buy on the Internet, but U.S. Customs and Border Protection could seize your purchase because certain regulations prohibit the importation of dairy products from particular countries without a permit," the CBP website warns. Depending on the country of origin and quota restrictions, even linen products can be held in customs if they arrive in a quantity that may not indicate personal use. In a worst-case scenario, CBP can outright destroy items that "are unsafe, that fail to meet health code requirements or that violate quota restrictions."

Beware Fines
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Beware Fines

Not only can the customs agency charge you to store items it processes for you, but it can penalize and fine you for various infractions. Those penalties can either be a percentage of the value of the goods you've tried to import, or a base penalty for specific infractions. A first offense for not declaring an item or paying duties on it can range from $50 to $1,000, while fines for technical and reporting violations start at $500. The penalties go up with the value of the product, so the more costly the item you buy, the more it's going to cost you if customs doesn't like what you're importing.

Ask Questions
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Ask Questions

Is shipping free? If not, determine if it's coming by freight, courier service, or international postal service. Ask what the exact delivery arrangements will be, as a purchase that doesn't guarantee door-to-door delivery is basically telling you to go to a port and/or hire a customs broker. Can you trust the seller to provide accurate information on customs documents? Look for online reviews of the site you're using, as providing misleading or inaccurate information about the shipped item is illegal and puts you on the hook for fines and legal liabilities.

Seek Free Shipping
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Seek Free Shipping

Customs will take a bite out of any bargain, so it helps to find a reputable seller that will ship to you for free. Amazon, certain eBay listings, DealExtreme, YesAsia, Marks & Spencer, Dorothy Perkins, and BetterWorldBooks are just some of the sites that offer free shipping to just about anywhere in the world. Note that, in some cases, a minimum order amount may be required to qualify.

Hit the Pharmacy
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Hit the Pharmacy

While there are certain restrictions on buying prescription medicines from foreign countries online, it's getting easier. The Food and Drug Administration still has to approve medicine that comes in, and decides if it may be released to the addressee or seized. But "right to try" legislation and provisions allowing hand-carried prescription drugs from Canada or Mexico have made online pharmaceutical sales a bit more accessible.

Download At Will
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Download at Will

Electronically transmitted information — streaming and downloading music, ebooks, and poster files — isn't subject to duty. However, CBP wants consumers to know that unauthorized downloads of copyrighted items and downloading of child pornography is still subject to prosecution.

No Delivery Notification
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No Delivery Notification

If you haven't had an item shipped directly to you, customs won't tell you when it arrives at a point of entry. You have to figure out the scheduled arrival date and follow up. If 15 days pass and you haven't presented paperwork, you're on the hook for storage charges. If you lose track of items for six months or more, they could be sold at auction.

Watch the Quotas
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Watch the Quotas

There's an entire list of items that are subject to a quota limit if they're imported for commercial use. While those quotas don't generally apply to items imported for personal use, there's one big exception: made-to-measure suits from Hong Kong. So, natty dressers, take note.

Don't Try This At Home
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Don't Try This at Home

If you suddenly get the idea that you want to be an online seller and export goods to other countries, that's a whole other regulatory nightmare. Most countries have import laws of their own, while commodities, cars, and goods with potential military applications — including some electronics and software — have to be cleared through CBP before they are exported. Meanwhile, if you export goods worth more than $2,500, you have to follow formal export procedures. So, unless you're really willing to do the legwork necessary, you should probably stick to shopping — not selling.