February 24, 2014

Why I will no longer shop at Sephora

Hello readers,
I have a different kind of post for you today. Recently Canadians have been outraged to learn that Sephora has started charging duties on some online orders from the Sephora.ca website. If we were allowed to shop on the American site and pay the American prices I would be ok with this. However, we are only able to shop from Sephora.ca which charges higher prices and local sales tax. I decided to dive a little deeper into the numbers to see how much more we are paying. As a statistician, this is my cup of tea! It's not too often I get to combine stats with makeup! I gathered data on February 24, 2014 from both the sephora.com and sephora.ca for the 20 top best selling products according to sephora.com. I then recorded the prices for these products from both the US and Canada websites along with and taxes and/or duties charged on the Canadian site. The USD prices were converted to CAD based on the February 24, 2014 exchange rate of 1USD = 1.11CAD. Taxes and duties were determined by adding each item to the cart individually and proceeding to the final stage of check out before payment. You can see all the data I collected in the table below.

Out of the top 20 US products 2 were not available on the Canadian website so our final data set contains the top 18 products available on both sites. On average, even taking into account the exchange rate, Canadians paid 5.29% more for identical products. I also took a look at the local taxes charged. As an Ontario resident I should be charged 13% sales tax. Seven out of the 18 products got charged significantly more, ranging from 13.83% to 13.91%, ten of the 18 got charged the right amount (12.98% - 13.03%) and one was charged no tax at all. That means that Ontario residents have a 39% chance of being overcharged for their local taxes. Finally I took a look at duties. This is the newest charge that has been added to the sephora.ca checkout process. I checked my previous 5 orders placed between October through December of 2013 and none had any duties charged. Seven of the 18 items had duties charged at checkout. These charges ranged from 4.56% - 6.4%.

Why does this make Canadians so angry?  When Sephora was asked why Canadian prices were so much higher than American ones after taking the exchange rate into account they responded "At this time the Canadian price is based on the suggested US price, including adjustments for exchange rate, customs and brokerage fees."

According to this the higher prices we pay already cover border fees so why are we being asked to pay even more border related fees?  It feels like we are being double charged.  When I asked about the recently added duty charges I was told it was because they were planning to expand into other countries.  Why should their business expansion cost Canadians more when nothing has changed with regards to sephora.ca?

What's the point of even having a .ca website if we still have to pay import and border fees?  It's like we're shopping domestically and internationally all at the same time and being charged taxes for both aspects.  I would love it if Sephora let us shop on the American website, shipped via USPS and let Canada Customs deal with any additional border charges.  So many other American websites operate this way.  Or, if they want a separate .ca website where they charge us local tax treat it as if we are shopping from within Canada.  There are physical Sephora stores in Canada so they already have to send product across the border.

As a Canadian I've had enough.  I really love some of the products I can get at Sephora but it's just not worth paying more, paying local taxes and potentially paying duties. What's even worse is that recently the Canadian dollar has lost value.  This means that historically there has been an even greater difference between the sephora.ca and sephora.com prices.


This is why I vow to never shop at sephora.ca again.  Considering that most of my purchases were online impulse buys instead of things I actually needed this means a loss of business for Sephora.  I know there are many fellow Canadian makeup addicts who feel the same way.

- Michelle

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