Prices in the US are displayed BEFORE sales tax is added. So a customer in the US will always pay more than the advertised price. Exact amount will depend on how large the sales tax is, which usually varies by state. I have no idea how this is handled for internet transactions.
Prices in Europe/UK are displayed AFTER sales tax is added (VAT).
ArenaNet’s European operation is based out of the UK, so the VAT rate is 20% for both Euro and GBP transactions.
Advertised US dollar price for 800 gems: 10.00 dollars
Advertised Euro price for 800 gems: 10.00 euros
Advertised GBP price for 8000 gems: 8.50 GBPUS dollar price after adding 20% sales tax: 12.00 dollars
Euro price converted to US dollars: 13.03 dollars
GBP price converted to US dollars: 13.72 dollarsSo if you use the $12 price as the base for comparison, it’s not such a big difference.
It’s also worth bearing in mind that currency conversion rates vary over time, with the Euro being more volatile than GBP at the moment. When I ran the same numbers during one of the Beta weekends, the Dollar and Euro prices were almost equal, and the GBP price was a little lower than it is now.
It’s not feasible to keep changing the Gem prices as currencies fluctuate. The 1 dollar = 1 Euro ratio makes sense, because this comes out somewhere close depending on what the Euro exchange rate is doing this week.
The GBP to dollar exchange rate has been reasonably stable for the last couple of years though, so on the face of it the GBP prices are higher than they need to be after taking sales tax and currency conversion into account.
This should come as no surprise to anyone given how we’re always shafted in the UK on this sort of thing, but it’s not as extreme a difference as it appears on first inspection. Should be more like £7.50 rather than £8.50.
The problems arise once again when Arenanet and others try and justify this all by saying that the UK and EU have VAT on at 20% and then say that figure loud enough to make you think that it is the same figure for the US sales tax calculation. However trawling through the internet looking on multiple website and wiki’s I cannot find any information which supports this.
From the various places I’ve looked sales tax in the USA varies from state to state and can be anything from less than 1% up to around 9-10%. This falls a very very long way short of the bandied about 20% figure that the UK and EU have to live with for comparative reasoning.
So once again the figures go like this:
Prices in Europe/UK are displayed AFTER sales tax is added (VAT).
ArenaNet’s European operation is based out of the UK, so the VAT rate is 20% for both Euro and GBP transactions.
Advertised US dollar price for 800 gems: 10.00 dollars
Advertised Euro price for 800 gems: 10.00 euros
Advertised GBP price for 800 gems: 8.50 GBP
Baseline US dollar price for 800 gems (before sales tax): Still 10.00 dollars
Baseline Euro price for 800 gems (minus the 20%): 8.34 euros
Baseline GBP price for 800 gems (minus the 20%): 7.08 GBP
Or going the other way>>>
US dollar price after adding (1%)-(10%) sales tax: 10.10 or upto 11.00 dollars
Euro price converted to US dollars: 13.04 dollars
GBP price converted to US dollars: 13.72 dollars
So even in the worst case scenario where there are states that have to pay as much as 10% on sales tax they are still getting a vastly superior deal to the UK and EU counterparts. Anywhere between 2-3 dollars cheaper PER 800. Or if you want that in percentages between 16-27% cheaper in dollars depending on what the state sales tax rate is compared to UK & EU.
It may sound like small change when you are talking only 2-3 dollars but multiply that by the potential tens of thousands of EU & UK gem purchasing accounts and then scale it up for those not just buying 800 gems but maybe up to 4000 at a time. Those 2-3 dollars a pop suddenly start looking like tens if not hundreds of thousands of dollars that we are getting shafted over in favour of the US.
(edited by Rhovannon.9471)