Uncertainty.
There is only one certain thing that has come from the Leave vote — it’s certainly uncertain what will happen next.
But just minutes after the Brexit vote, we did see changes. And almost all of those charges are great for online shoppers — especially those who are looking for terrific deals.
1. Your Pounds Buy Less Outside Britain
Immediately after the news broke that the Leave vote had won, the British pound fell dramatically in value. This means the pound isn’t as valuable as it previously was compared to other currencies.
Therefore, if you’re looking for great deals, don’t look outside of Great Britain. Your money will buy you less when you spend it in other countries, at least for right now. But there’s good news about the pound.
2. Bargains Abound
If you shop in the UK, those same pounds that have been devalued will buy you quite a bit more than you might expect. It’s not just the money in your bank account that has lost a bit of value. Prices have had the same reaction to the dropping pound.
This means stores, especially faced with the uncertainty of Brexit, have adjusted some of their prices to account for the falling currency value. This is true of some brick and mortar stores, but even truer of online purchases. Online retailers can adjust to a currency downturn immediately, and they have.
Many of the best bargains are on UK websites you might not have shopped on previously because of high tariffs and taxes. Those tariffs and taxes don’t bite quite as much now and prices are falling.
3. Your Foreign Currency Buys More
If you’re living outside of the UK and working in a different currency than the pound, you’re in the best position of all. The pound has fallen against the dollar and other currencies, so shopping in dollars saves you even more.
This is, again, especially true for online shopping, as they have had the most dramatic price fluctuations as the pound has fallen. Seek out the British Amazon, for example, to find great deals on items priced in pounds.
Granted, there are often high tariff and shipping fees for online purchases, so be sure to include those costs into items you’re purchasing. Even with those tariffs, you’re still likely to come out ahead. But you can save even more if you’re outside of the UK by using a shipping company to buy up items and ship them for less.
4. Cheap Prices Are Short-Lived
Immediately after the Leave vote, the pound fell dramatically. It has continued falling for a bit, but is now showing signs of stabilizing as some of the uncertainly passes. There will be additional shocks to the currency system as the UK actually splits from the EU. This will be a rather drawn-out process, and it’s very likely that the currency will stabilize and begin to rise again.
For savvy shoppers, this means that the online deals are great right now, but they may not stay that way in the long term. The longer the pound stays devalued, the longer the low prices stick around. But once the pound begins rising again, prices can be expected to go right up again, too.
5. Electronic Prices Will Rise
Not every item will drop in price during the Brexit uncertainty period. Electronics may actually become more expensive. Very few electronics are made in Britain, so companies outside of the UK must make some adjustments in their pricing in the UK to account for the fallen pound.
HP has recently raised prices in the UK 10 percent across the board to compensate for the weaker pound. Dell has made a similar move, raising prices to be sure the cost of manufacture and import are covered in the retail price. The best bargains here are not going to appear until the pound strengthens against foreign currencies again.
6. Digital Products Are The Best Buys
Of all of the online shopping deals to be had, the best are the digital products sold on UK websites. Selling physical items on websites still requires some form of inventory or controlled costs for moving tangible products.
Digital products, on the other hand, are not tied to shipping or holding costs. That means there are constant fluctuations in prices of music, digital books, software, game, and apps. Lately, the items that are sold in pounds have fallen, leaving plenty of bargains to be found on the UK versions of Amazon and Steam.
7. No Risk of Import Issues with Digital Purchases
Every physical purchase made online may be subjected to import taxes and duties. It’s a cost you have to factor into the online sales of actual items, but it’s completely non-applicable to digital products that are purchased in the UK.
Immediately after the pound began falling, gamers and savvy online consumers switched their home counties to the UK on their App Store and websites like Steam. Terrific bargains have been found in digital products priced in pounds, and there is no risk of duties since the digital products are purchased and downloaded, not purchased and shipped.
8. Import Taxes Could Rise
Many of the best bargains for those living in the UK are going to be short-lived. As the UK moves forward in separating themselves from the EU, they can expect two things: inflation if the pound remains down and higher import taxes from the EU.
One benefit of being part of the EU was the elimination of import taxes between EU countries. With the UK no longer part of that legal entity, there will no longer be an EU trade agreement. It’s logical to assume that import taxes will return on items that are manufactured outside of the UK and shipped in. This will include everything from candy bars to electronics.
9. UK Shoppers May Pay More Down the Road
Import taxes aside, as the value of currency falls, deals are to be found immediately in the uncertainty. But prices won’t stay depressed for the long term. The devaluation of currency will eventually lead to a round of inflation where pounds go shorter distances in buying popular and everyday items.
For the savvy shopper, it makes sense to buy items now while prices are low rather than wait for better deals down the road. It’s very likely that those better deals simply won’t be forthcoming — at least not for a while. On the other hand, those shopping in the UK with stronger currencies other than the pound will be able to buy more now and potentially into the future as well.
10. Online Clothing Will Drop in Price
Leaving the EU may raise the price of some goods that are subject to import taxes and tariffs, but other items may fall a bit in price. A report in 2013 by the House of Commons library found that EU membership appears to increase the price of consumer items like clothing.
It follows that being out of the European Union will lead to a drop in clothing prices as the UK will no longer be subject to the same requirements as other countries. This price drop will be seen first online as internet prices tend to be more responsive to sudden changes than brick and mortar stores with more fixed costs.
11. Powerful Vacuums Are an Option Again
In one rather amusing example, Brexit will actually free up some purchases for UK shoppers. As members of the EU, Britain was required to follow requirements of that entity. In 2014, the EU banned “powerful vacuums” over 1600 watts in a bid for the environment.
The restrictions are scheduled to tighten up in 2017 when vacuums over 900 watts are forbidden in the EU. Fortunately, if you’ve been in the UK dying for a Dyson or Miele, your time has come. There’s soon to be no rule blocking the most powerful vacuums for UK residents.
Likewise, if you smoke menthol cigarettes, you’ve dodged a bullet as well — those are to be banned by the EU in 2022.
While there is certainly uncertainty about the future of the EU and Britain, in the meantime there are bargains to be had! Prices may shift as currency valuations change and Britain formally splits from the European Union, but for now, at least, consumers are coming out ahead.
Featured photo credit: Unsplash via hd.unsplash.com
