With the increased availability of broadband access, affordable data costs offered by mobile operators and the consistent development of mobile devices, online shopping has gained momentous traction amongst South African consumers.
Norman George, Operations Director at DHL Express South Africa says that with the upcoming festive season fast approaching, consumers are increasingly choosing to purchase gifts online from retailers from both South Africa and abroad due to the ability of being able to make a selection from a wide range of products at competitive prices, without being limited by geographical locations.
“With improved infrastructure, in terms of Information and Communications Technology (ICT), and online safety and security, more South Africans are choosing to make use of online shopping over traditional brick and mortar outlets due to the variety of products available to them at just a click of a button,” says George.
He points to recent figures mentioned at the Goods Council of South Africa summit which revealed that online retail in South Africa has to date reached R4 billion in 2013, while reaching R1 trillion internationally.
He says that while online shopping has many benefits, not many South African consumers are aware of the regulations involved with importing products purchased online from international retailers, which could lead to consumers incurring additional expenses, thereby making the product less of an attractive buy. “One of the most common misunderstandings is often as a result of consumers not being fully aware of the current regulations that apply when goods are imported into the country.
“All shipments transported across international borders must be cleared through Customs, where, depending on the type of goods being shipped, they may also be subject to certain other restrictions and regulations. There are goods such as clothing that attract high rates of duty and are subject to interventions by Customs where the price, contents and country of manufacture are often interrogated to mitigate a wide range of risks.”
He adds that confirming any possible restrictions attached to particular goods is vital and should be the first action taken by consumers before making a purchase online in order to avoid suffering any financial losses in the event that goods are detained by Customs.
When purchasing goods online from international retailers, George says that it is important to bear the following factors in mind to avoid additional costs or a delay in delivery of the goods:
• Import taxes and duty: All South African taxes and import duty costs are calculated specifically on the value of the imported goods. Consumers should also be aware that certain products such as footwear and wines are calculated part in value and/or in quantity, and may be subject to permit requirements based on quantity, while others, such as clothing, jewellery, perfumes and mobile devices, may only be calculated on the value of the product. It is important to note that the import of any second hand and used goods, even those imported for the purpose of donations (excluding Clothing), is strictly prohibited for entry into the country without an import permit.
• Customs clearance: When shipping with certain express operators, no duties are payable for shipments below R500 in total and are processed under an informal clearance at Customs. Where the shipment total value exceeds R500, full duties and taxes are payable depending on the commodity being shipped.
• Choose a suitable courier service: Citizens of South Africa are allowed to import goods using their identity number, however if this information is not available at the time of import for shipment values exceeding R500, the shipment understandably cannot be cleared on arrival until the information is obtained from the customer. This delay ultimately defeats the purposes of using an express delivery service and therefore submitting all information required is crucial.
• Gifts: There is a value limit on gifts. Gifts are only acceptable between individuals and a full description of the contents is required, the generic description “Gift” is not accepted. Gifts up to a value of ZAR 400.00 can be cleared, but any value above that will be deemed commercial goods.
• Be aware of the different shipment costs: It is important to establish what costs the shipper and the customer will be responsible for prior to the shipping of the goods.
There are ultimately three main costs associated with the movement and clearance of goods with express operators: a) the cost of the goods payable to the shipper, b) the shipping costs to the customer’s door, and c) the duties, taxes and Customs clearing costs.
In most instances, the duties and taxes payable in the country of destination cannot be accurately determined by the shipper at the point of ordering the goods and these costs are not included by the shipper in their quotations to the customer.
As a result, on arrival into South Africa, these charges are billed to and payable by the customer before the package can be claimed – often to the customer’s total surprise. This ultimately could result in the landed cost (the total amount of all costs) of the e-retail merchandise becoming much more costly for the buyer than expected and could potentially put them off repeat on-line purchases.
There are however e-retailers that offer Delivered Duty Paid (DDP) terms which confirms that all costs, inclusive of the duties, taxes and clearance costs, are payable by the shipper and that the customer is not responsible for any surprise costs.
“It is advisable for consumers to speak to the online retailer or a local expert / service provider should they be unsure about any regulations that may apply to their purchase,” concludes George.