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Canada: Is a Black Friday road trip really worth it?

Canada: Is a Black Friday road trip really worth it?

noviembre 23, 2016

👤Periodista: María Alejandra Lopez 🕔23.Nov 2016

 

Black Friday may be a U.S. tradition, but Canadians have bought into the shopping frenzy. Thousands will cross the border in the hope of snagging one of these legendary doorbuster deals. But when you factor in the cost of the trip how much are you really saving? Is it actually worth the effort?

If you’re one of the fortunate shoppers able to score big doorbuster deals it might be, at least as long as you’re okay with waiting hours in the cold and not afraid to throw the occasional elbow to protect your prize. Consider this Walmart doorbuster. The discount retailer is offering a Samsung 4K 60″ TV for around US$600—a US$1,000 savings. With deals like that you can see why consumers are breaking down the doors.

Does the math make sense?

Doorbusters are particularly enticing but most Canadians are convinced that any of the deals they’ll find on that day justify the trip. Unfortunately, the math suggests otherwise.

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Consider the following: The average American spends roughly US$400 on Black Friday so we’ll use that as our baseline. At the current exchange rate that works out to about $525 Canadian. For argument’s sake, let’s assume the average purchase is 40% off. In U.S. dollar terms that works out to a savings of roughly US$270 or $350 in Canadian dollars.

Sounds pretty good right? Not so fast. Most Canadians are likely to stay at least one night in the U.S., which means you have to factor in the cost of lodging, food and gas. If you’re willing to split the costs with a friend—and I can’t imagine why anyone would want to do this on their own—expect to shell out a modest $250 per person or more for those costs alone.

Then there is a little matter of taxes and duties at the border. If you’re staying 24 hours you’re allowed to bring up to $200 back across the border tax free, excluding tobacco and alcohol of course. If you go over that then the duty and taxes apply to all of your purchases. (The Canada Border Services Agency has a simple calculator to see how much that might set you back).

Let’s stop right there for a moment. No matter how sweet the deal, there isn’t a realistic scenario where you can keep your spending under $200 so you don’t pay at the border and still make the trip cost effective. In other words, you’ll need to price in a little extra to ensure your have a smooth trip back across the border.

A lot of effort for a small payoff

Now let’s go back to our original scenario. When you back out these additional costs, instead of saving $350 you are saving just $15. That’s a lot of effort for virtually no payoff. It’s worth noting that these savings compare to buying the same goods in Canada at full price. The math is more forgiving if you’re willing to split the cost of the trip four ways, but even then those savings amount to less than $100.

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With a better exchange rate the math may start to work in your favour, but few see the dollar returning to parity anytime soon. Even if some of the online deals in the U.S. aren’t as exciting as the in-store offers, if you expect to spend less than a US$400, they’re probably a better deal since you won’t have to deal with all of those ancillary costs of staying overnight.

Still unsure if you should make the trip? Here are two different scenarios to consider: one where you save an average of 40% on your purchases and another where you’re saving 60%. We’ve also broken our results into two groups to show you how the trip works out depending on how many people you’re splitting your costs with.

Source: Money Sense

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