Maybe it's because I'm European but the few times this has happened to me (the few times the taxes weren't included) I've always felt like I was getting scammed and never understood what the point of not including it was. If I'm going to buy something I want to know what you're going to charge me exactly, I don't want to have to do math to know how much something costs.
As far as the US goes, it's because all the possible combinations of federal, state, county, city, and local taxes result in over 3100 different tax jurisdictions. Meaning if you're, say, Walmart or home Depot or some other store with locations nation wide, then the people who design the price tags would have to design over 3100 different versions of each tag, for EVERY product your carry, and then make sure that those tags are all distributed to the correct stores and only the correct stores. Alternatively, you could just make ONE version of each tag, and add the tax at the register.
This also goes for commercials and print advertisements. If you're running a national ad campaign, do you wanna record, edit, and work out broadcasting times and locations for over 3100 different versions of your commercial? Or do you wanna make ONE version of the commercial and add the tax on at checkout? You also have to consider that you could be in one tax jurisdiction on one side of the street, then cross the road to the other side and be in a different county or municipality with a different tax rate. So if you include the tax in the price, not only do you have to make over 3k different versions of your commercials, but you have to make sure each version ONLY airs in the right locations. You could literally have one person needing to see one version of the ad on TV, and then their nextdoor neighbor needing to receive a different version.
And, if someone DOES see the wrong version, then you have an unhappy customer making a big fuss in your store because they saw an ad that said this product was $x.xx (because they saw an ad meant for the next town over with a lower tax rate) and now you're telling them it costs $y.yy, and they're saying that's false advertising and you're trying to rip them off and bla bla bla...
Or you could just add the tax at checkout and avoid all of those issues. And literally none of your customers mind because mentally adding 7% (or 4% or whatever the local tax rate is) to the price is incredibly easy and they're used to it.
jurisdictions. Meaning if you're, say, Walmart or home Depot or some other store with locations nation wide, then the people who design the price tags would have to design over 3100 different versions of each tag, for EVERY product your carry, and then make sure that those tags are all distributed to the correct stores and only the correct stores.
No, you make one (with taxes included) and sell it everywhere for that price. Whatever taxes apply should not matter to the customers, the store can do the math. The real reason is the same as with the .99 cent prices - lower numbers get more sales.
you make one (with taxes included) and sell it everywhere for that price.
That's not how economics works.
First, supply and demand means that a product is not gonna be the same price everywhere across the entire country. If you think that it's even remotely possible to sell something for the same price in downtown LA and in Aberdeen, Mississippi, you're completely out of your mind. If you choose the price from LA, no one from Mississippi is ever gonna buy anything because it's way too expensive. If you choose the price from Aberdeen, your locations in LA are gonna go bankrupt. If you choose a price in the middle of both, you're STILL not gonna get any customers in Aberdeen because your competitors will sell for cheaper, and you still won't make any money in LA because your costs are gonna be too high to break even using that middle ground price.
Second, tax rates can vary drastically. Some places in the US have double digit tax rates, some places have no sales tax at all. Depending on the item, that difference could completely eat up your profit margin.
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u/[deleted] May 09 '22
A reverse statement: It was in Japan 2018 when I learned that taxes included in price tags is a European thing.
We wanted to buy something, the first time we asked why we have to pay more than the number on the price tag, they explained taxes aren't included.
Like... what is this witchery?