Why an $11 book costs $50 on eBay

Why an $11 book costs $50 on eBay
TheStar.com - Business -

April 12, 2008 Ellen Roseman

John Sacke got a surprise when he bought an item online at eBay for $27.99 (U.S.).
After charging it to his PayPal account, linked to his CIBC Visa card, he got a message from PayPal saying he would pay $29.92 in Canadian dollars.

Just after his email arrived, I heard from Ray Ho with a similar complaint. Not only did PayPal convert his eBay purchase into Canadian dollars, but he found an extra markup once he checked his credit card statement.

If you check PayPal's website, you can find information about its fees for Canadian users.
Here's what it says about currency conversion:

"The exchange rate is the retail foreign exchange rate as determined by PayPal at the time a transaction is completed. The exchange rate is adjusted regularly, based on market conditions, and includes a 2.5 per cent fee above the rate at which PayPal obtains foreign currency. The 2.5 per cent fee is retained by PayPal. This fee only applies when PayPal performs the currency conversion."

You're usually given the choice of using PayPal's currency conversion or your credit card company's conversion.

So, check with the credit card issuer to see whether it has a foreign exchange fee – most do – and whether it's less than 2.5 per cent.

The other difference is that when PayPal converts the currency, you can see the rate at the end of your transaction.

If you were making a U.S. dollar purchase yesterday, you would have seen PayPal's rate as $1.05 (Canadian) for $1 (U.S.).

If you don't use PayPal's conversion, you won't know how much you will be charged until you check your credit card statement.

Is there a way to avoid such fees? I had to track down someone in San Jose, Calif., to get an answer.

"PayPal customers have the ability to add a U.S. bank account to their Canadian PayPal account," says Sara Gorman, a spokesperson for PayPal, which is owned by eBay.

"So, if a Canadian customer wants to make a payment in U.S. dollars, there would be no currency exchange fee for payments originating from a U.S. dollar account."

Just in case you're confused by the last sentence, she's saying you have to open a bank account in the United States – not a U.S. dollar account at a Canadian bank.

If you buy occasionally at eBay, you may find it's not worth the trouble. But check with your Canadian bank to see if it's affiliated with a U.S. bank and if it can help.

Personal note: As an occasional eBay buyer, I made a winning bid last month on a 1,000-page book, How to Cook Everything Vegetarian by Mark Bittman.
I won it for $11 (U.S.), compared to the Canadian list price of $41.99.

My glee disappeared when I got an invoice from the seller, located in Michigan, for $47.70 (U.S.).
That included shipping and handling via U.S. first class mail ($26.20) and shipping insurance ($10.50).

I asked the seller if there was a cheaper way to ship the book and she said no. "All of this was explained in the listing," she said.

I hadn't seen any such details – and if I had, I wouldn't have bid for the item. But not wanting to get negative feedback, I went ahead.

My cookbook arrived last week, packaged beautifully. The final bill was $50.31 (Canadian) after using PayPal's currency conversion.

The lesson: Always ask about shipping costs to Canada. And find a local source if you can, especially for heavy items.

Professor Randy Pausch

Carnegie Mellon Professor Randy Pausch, who is dying from pancreatic cancer, gave his last lecture at the university Sept. 18, 2007, before a packed McConomy Auditorium. In his moving talk,

The close: TSX is in the money

The close: TSX is in the money

RTGAMChampagne corks were popping on Bay Street on Thursday afternoon after
the SP/TSX composite index closed at 13,909.58, up 159.03 points, or 1.2 per cent. The gain put the benchmark index above water for the year - by 0.6 per cent. That's the first time it has been in money-making territory since Jan. 3. Let the good times roll!The TSX twins - Research In Motion Ltd. and Potash Corp. of Saskatchewan Inc. - were again the biggest two drivers behind the push to profitability, rising 2.4 per cent and 1.7 per cent, respectively.But the index was actually firing on all cylinders, with all 10 sub-indexes contributing to the gains.

The utilities sub-index was the biggest winner, thanks to TransAlta Corp.'s 5.9 per cent gain. Meanwhile, MDA Corp., whose deal to sell its satellite unit to Alliant Techsystems Inc. was scuttled by Ottawa, fell 8.5 per cent, making it the single biggest drag on the index.In the United States, technology stocks were all the rage after reports connected Microsoft Corp. to News Corp., and Yahoo Inc. to Time Warner Inc.'s AOL unit. Intel Corp. rose 3.1 per cent and International Business Machines Corp. rose 1.7 per cent. As for Microsoft and Yahoo, the two tech companies in the midst of a takeover dance, their stocks rose 0.8 per cent and 3 per cent, respectively.

The Dow Jones industrial average closed at 12,581.98 up 54.72 points or 0.4 per cent. The broader S[amp]amp;P 500 closed at 1360.55, up 6.06 points or 0.5 per centnbsp;Copyright 2001 The Globe and Mail

Worst from credit crisis yet to come: Soros

Worst from credit crisis yet to come: Soros

Associated Press

April 10, 2008 at 4:27 AM EDT

SHANGHAI — The credit crisis is far from over, billionaire financier George Soros warned Thursday, urging regulators to move faster to contain damage from the collapse of the housing finance markets.

“I think the situation is more serious than the authorities admit or recognize,” Soros told journalists in a conference call. Measures taken so far to slash interest rates and stimulate the economy were “necessary but not sufficient,” he said.

“Because of that, I think the situation is going to get worse before it gets better.”
Mr. Soros is promoting a new book, “The New Paradigm for Financial Markets: The Credit Crisis and What It Means.” He has urged regulators to move more aggressively to improve market oversight to curb risks from excessive reliance on debt for financial speculation.

He said he agreed with the International Monetary Fund's estimate of more than $1-trillion in losses linked to the collapse of mortgage-backed securities.
Losses disclosed by financial institutions so far are related only to the decline in value of those financial instruments, Mr. Soros said.

“They do not reflect in any way a possible decline in the value of the loans held by the banks,” he said. “We have not yet seen the full effect of the possible recession.”

Mr. Soros pointed to the potential for massive losses from complex investments linked to the U.S. subprime mortgage market, such as credit default swaps, or CDS, which allow investors to put bets on the likelihood that companies will default on bond payments.

He described as a “Sword of Damocles” the $45-trillion worth of credit swaps.

“That's more than five times the entire government bond market of the United States. It's almost equal to the entire household wealth of the United States,” Mr. Soros said.

“This $45-trillion market is totally unregulated,” he said.