Don't be ripped off on IT goods

Would you rather pay $88 or $61 for a video game? I think I could hazard a guess at what your answer might be. Although this seems like somewhat of an absurd question, it is one that we are nevertheless asked on a daily basis. What is really absurd is that we are expected to answer with $88.

These are two different retail prices for the same PC game Diablo III, which became the fastest selling game of all time when it was released earlier this year. This is just one of nearly 200 examples of price discrimination which I have gathered over the past several weeks. The higher price tag is the one payed by Australian gamers, while those in the United States enjoy a 44% discount.

For a long time, companies have hidden the cheaper option from Australian consumers behind the vast oceans and high borders which separate us from the rest of the world. They were free to charge one price in Australia and another in the US, safe in the knowledge that most of us could never figure it out. Then came the internet.

Websites such as eBay and Amazon have let Australians know just how much we’ve been ripped-off. With a click of the button those barriers melt away and Australian consumers can catch a glimpse of what the rest of the world is paying. Not only that, but we can now choose were we want to buy. It should not be surprising at all that Aussie shoppers are flooding to the World Wide Westfield in droves.

There are huge savings to be made. Our analysis (conducted for the Parliamentary Inquiry into IT price discrimination) shows that Australians are paying on average 50% more for PC games, 34% more for software, 51% more for iTunes music, 88% more for Wii games and 41% more for computer hardware than our US counterparts.

One particular software product, Visual Studio 2010 Ultimate (With MSDN), was $8,665.29 more expensive in Australia. For this amount, it would be cheaper to employ someone for 46 hours at the price of $21.30 per hour and fly them to the US and back at your expense. Twice.

When it comes to why these price differences exist, there are not a whole lot of answers - just a lot of finger pointing. The GST, high rents, retail wages; none of which can fully account for the massive differences we can see. My suspicion is that the international companies which hold the intellectual copyrights are charging higher wholesale prices, knowing Aussies will just pay anyway.

My advice? Head online. But be sure to know your rights when you do. Choose websites carefully, as it may be hard for Australian authorities to help in the event something goes wrong. That being said, don’t be scared to take advantage of online bargains. Many overseas companies can have great customer service, and will be able to help you out with faulty goods. 

Some product manufacturers, such as Apple, have international warranties. Others, such as Canon and Nintendo, refuse to recognise products bought outside of Australia or New Zealand for warranty purposes.  Luckily, some sellers, including the direct importing website Kogan, will service the products they sell under warranty.  If you do your due diligence you should be able to pick up a bargain online with confidence.

Share your online stories in the comment section below, or on our Facebook page.