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Distance Selling and Hidden Fees

By: Lucy Debenham BA (hons) - Updated: 12 Mar 2012 | comments*Discuss
 
Distance Selling Buying Online Hidden

Distance selling is the term used to describe the method of selling products in a non face-to face environment. It used to be that mail order catalogues and telephone sales were the most common modes of distance selling. However, in recent years, thanks largely to international phenomenon of the Internet and digital television, distance selling has become one of the most popular ways to shop.

The sheer volume of websites and channels selling goods and services has meant that there is more choice than ever before, and purchasing can be done at almost any time of the day. This flexibility and choice is undoubtedly fantastic for consumers, but it can have a downside.

Sometimes the price that you see listed on the television or webpage may not always be the price that you pay. Hidden fees can be applied in many different areas of distance selling, and can be dishonestly priced and overinflated. One way to tackle this problem is to thoroughly research the company or individual from which you wish to purchase the goods or services, particularly with online auction websites. Customer reviews and feedback can be very revealing! But another tack is to know where the hidden fees can be applied, so that you are able to choose a responsible and reputable, straightforward seller and understand the true cost of the goods you're purchasing.

Shipping & Delivery

The most common and well known, yet still ‘hidden’ fee, related to distance selling is the cost of postage and delivery. This cost can be regarded as hidden, as some distance sellers will only disclose the cost of shipping or postage at the last possible step in the payment process. It is not unusual for sellers to seek extra profit under the ruse of costly delivery expenses, by charging well above the standard courier, postal and packaging costs.

‘Administration fees’ may also be calculated into the total shipping costs, considerably boosting the final payment that you pay. If you don’t want to be caught out, it is best to contact the seller before you even start to make your purchase to get a quote for the complete shipping and delivery prices.

VAT & Customs Charges

You may be buying items from a company that appears to be UK or EU-based, or may not have checked the origin of the company at all! The reason this can be an important factor is because if you are buying products from outside the UK, you will have to pay extra undisclosed hidden fees. Customs Duty (from outside the EU) and Excise Duty (from inside the EU but not within UK) charges are applied to a vast array of items that are brought into the UK. Only a few items such as antique furniture and books are exempt from these charges.

The customs charge will apply to goods costing £7 and over, and Import VAT is applied to goods costing £18 and over. The actual charge applied varies on the item, something that can be checked out on the UK Government’s HM Revenue and Customs website.

Premium Phone Charges

If you have a problem or an enquiry with a product or service that you buy through the medium of distance selling, you will often be provided with a phone number to contact the relevant department. However, it is not uncommon for companies to provide their customers with a premium rate telephone number. Premium rate lines usually begin with the number 087, and actually generate a profit for the company. However, some companies may employ a freephone number, which usually begins with the prefix 0800.

Unseen Charges

When utilising booking services such as online flight, hotel or concert tickets, the chances are that the price of the ticket advertised will not be the final price you pay. Distance selling, especially online sales, can be plagued by extra hidden fees. Booking fees and administration costs are usually added to the headline price, as this is one major area in which the company will make their money.

With concert tickets, you can sometimes incur a single booking fee, but sometimes this hidden fee is also applied to each ticket purchased. Check out the terms and conditions on the website, or ask the customer service assistant before you begin your booking.

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Don't these European companies have to get consent to impose VAT charges on American consumers?
disgruntled - 12-Mar-12 @ 5:50 PM
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