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Conducting Transactions over the Internet

International Transactions

Despite the large number of advertisements from the U.S., the Internet is a global institution. All advertisers, even individuals, need to be aware of the international culture and reflect it in their ads. Finally, they need to be prepared to deal with international issues if a potential buyer sends an offer from a foreign nation. Many successful transactions occur across country boundaries, but a few more topics need to be covered before shipping to other countries.

Use escrow

Unless a transaction involves items of very low value, use the escrow method for completing the sale. The advantages, in this case, are manyfold.

For one, paying an escrow service by credit card solves the problem of trying to deposit a check drawn on a foreign bank. The major credit card companies usually give better exchange rates than most banks because they can trade currency amongst their international operations. Meanwhile, most banks will charge a hefty fee, often US$20 to process a check drawn on a foreign bank. Meanwhile it can cost just as much for the buyer to acquire a cashier's check drawn on a bank in the seller's country. These charges, and the impossibility of recovering your money or items in case of fraud, makes the effective cost of escrow minimal to negative. Some people successfully send cash through the mail for small items, but as this is not recommended in the U.S., it is even less recommended internationally. Finally, COD is not available across international boundaries.

It is possible to send money orders across international boundaries, particularly for small transactions. The United States Postal Service, for example, has reciprocal agreements with about 105 countries for international postal money orders from the U.S. denominated in US dollars, redeemable at these nations' post offices. These countries should be able to provide the same service. The cost is about $3 (USPS form MP1) for much of Central America, North America, the Carribbean, and parts of South America. Expect to pay $7.50 for Europe, Africa, and eastern Asia, and ask your post office for an "Authorization to Issue an International Money Order." Quite a few prominent countries are missing from the list, and it can take a week to clear all the paperwork, so contact your postmaster for details.

Choose a courier carefully

Before shipping a package internationally, ask the shipping company how it handles international packages. Sending packages through many major couriers may result in additional fees on the receiving end for delivery to certain countries. These charges may cover expenses in clearing customs, or they may represent a brokering fee to transfer the package to a courier that delivers in the buyer's country. France and Canada are two prime examples with certain couriers. Some major couriers operate in different countries, so packages sent by one courier may not incur a fee for a package shipped from the U.S. to Japan, while another will. You must ask, and it may take a few tries because many representatives may not be fully aware of the international situation. Federal Express, despite their higher prices, if often good for international transactions because they operate directly in many developed nations.

Taxes and international restrictions

Most international sales are subject to import duties, when properly declared. Gifts and small transactions often pass through customs unnoticed in many countries, but the buyer can expect to pay sales, value-added, or import taxes in large international transactions. Make sure you know what those fees will be in your country before you finalize an offer to buy; these taxes sometimes exceed 100%. Duties can often negate the benefits of buying from a foreign country. Contact your nearest customs agent or international shipping company for more information.

While the buyer worries about duties, the seller needs to know of any restrictions on business to the buyer's country. For example, it is illegal to send many kinds of advanced technology from the United States to certain countries, and likewise across other international borders. Advanced technology is more encompassing than just weaponry and militaria. Products as simple as software or personal computers may face export restrictions punishable by jail time.

Make it easy, let someone else do the work

Because of the complexity, and sometimes absurdity, of international laws, and because of the documentation required on all international packages, all readers who wish to deal internationally should speak with a company experienced in such matters. Any local packaging and mailing service should be able to refer you to an appropriate company, or you can contact one of the following international freight forwarders:

Mailboxes Etc.
Chain of local mailing services which cater to individuals.
Overseas Alliance Group
International equipment freight forwarding for large transactions
USA, jc88@delphi.com (914) 472-3204

Questions you need to ask an international shipper:

Is it legal to ship this item to country X?
What import/export/value-added taxes must be paid?
What is the best way to ship, and how much will it cost?
What documentation is required?
How can international shipments be insured?

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