Hello, Australia. Have you gone completely insane? First you made it illegal for women in the porn industry to have small breasts—not normally a high crime in most countries in the world. Then you managed to pass a law allowing bored and/or horny customs officials to search computers for porn. Now, some stores in Australia are charging their customers to use the fitting rooms. If a customer buys an item in the store, the charge, which is as high as $50 in some cases, is then refunded to the customer.
Is this a good business practice? Does this even make any sense at all?
Not really. The reasons for the Brick and Mortar stores to charge a fee is that they are being forced to compete with foreign online stores to sell their clothing and shoes. Australian shoppers have to pay a high GST tax if they shop in Australia, but can save money if they shop online with foreign-based retailers. The Australian stores are angry that customers waste the stores time by trying on clothes or boots; instead of buying whatever they tried on, the customers then search online to buy the right clothes or boots.
While I can understand the retailers’ anger about the GST and competing with Internet retailers, I have a strange feeling that this might backfire on the retailers. If I’m shopping for a pair of boots, I might have an honest intention to buy, but would definitely be put-off by a $50 charge just for the privilege of trying on a pair or two.
The article I read about the new Australian practice doesn’t make it sound all that great. One retailer complained about a loss in sales because customers were shopping online for their True Religion jeans. I do understand that the loss in sales is not good for the Australian retailers, but it is hard to sympathize when you consider that the retailer is selling designer jeans.
Australian retailers also complained that wages and holiday pay were much higher in Australia than in either the United States or in Asian countries.
Again, the concerns of the Australian retailers are probably not just limited to Australia, but do the store owners really think their customers are going to be willing to pay as much as $50 for the privilege of a fitting room? Would you pay that much? I wouldn’t.
The solution may be found in a change of government policy.
"Bricks and mortar" retailers want the Federal Government to abolish a tax break for overseas retailers, who do not have to pay the 10 per cent goods and services tax or import duties of 10 to 15 per cent on items costing less than $1000.