Friday, May 23, 2008

Making shopping arbitrage possible or is it a con?

If you're a Brit that has done any shopping around on the internet, you'll have come across the following infuriating situation - the goods you want can be found on a US website at pound/dollar parity, but the website refuses to ship goods internationally or is apparently restricted by a manufacturer from doing so. It applies to DVDs, clothing, electrical gear amongst others.

Knowing my affection for arbitrage schemes, I was tipped off about BorderHQ, who provide you with a mailbox in the US and China with related mail forwarding services, thereby allowing you to shop across borders. Hence, you can sign-up and have domestic US and Chinese website deliver to BorderHQ for on-delivery to you. The service operates a membership scheme with varying price levels including a free service.

This scheme won't always work, as some websites also require the credit card address to be a domestic one. This both avoids them incurring international merchant fees charges, which are normally higher, and restricts trade to domestic buyers.

My nagging doubt about the service was that suppose I start sending goods to the service. Who's to say they will actually ship them on and won't instead keep the items? Doubt I'd have any recourse to anyone once I'd explained that I voluntarily sent my goods to an address I stumbled on the internet. I've no reason or evidence to believe that it is a scam, but it's plausible a scheme structured like this could be - similar to the "meet and greet" airport car service concerns I've expressed before here and here.

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