5

I need to decide whether to show prices on an online store with or without taxes. This is significant for the site and the user as the service is labeled as the cheapest on the market.

If taxes wouldn't be included then we would tell the user explicitly (e.g. " X price + taxes". This is a B2C site so user will always pay full price (meaning he won't be able to deduct those taxes as business can).

I'm afraid this can cause sticker shock to our users at the moment of checkout and I don't like it as practice but could work (Amazon does that and I still end up paying for something...)

What do you guys think?

  • 4
    What country is this online store for? It likely depends on the expectations of the customers. UK for instance would almost always show full prices including taxes. – JonW Feb 24 '17 at 8:53
  • 1
    Does tax vary by where the customer is located? In the US, it can change state-by-state and that is the reason tax isn't displayed next to the price and only the statement "plus tax" is included. – Rob Feb 24 '17 at 13:11
  • @jonW EU. It's not a requirement to add them but you do have to be explicit if the price includes them or not. – André Hess Feb 28 '17 at 14:06
  • @rob not really as the site is country based with the same tax to all the country – André Hess Feb 28 '17 at 14:07
3

Working with e-shops for quite some time now, I would say that this is country depending. In Europe, the customers would expect to see the taxes in the products. In the case of Canada and US, the customers are used to seeing the products without the taxes.

As a solution, I would propose to give the option to the customer to choose what they would like to see. Different design solutions could be proposed to that.

2

Display taxes along with product price only if it's a mandate by the country's law or else better show just the price with a note 'inclusive of all taxes'.

Showing taxes with a price gives transparency of the transaction, but it also introduces doubt in users mind.

Imagine I'm buying a product worth $50 and paying $15 taxes; total = $65, I might think for a moment about the extra $15 that's going as taxes. On the other hand when I see the final price as $65 (inclusive of all taxes), my mind is not aware of the amount of taxes I'm paying. All I know if I'm buying a product worth $65.

Price without taxes will result in increased purchase rate.

I can also relate this with the delivery charges criteria. The moment I see the delivery changes - I think of buying it from local vendors.

Update

This infographic speaks about the two reasons I mentioned earlier: http://ritholtz.com/2012/05/shopping-cart-abandonment/

enter image description here

  • 1
    "Price without taxes will result in increased purchase rate." - This is a bit of an assumption. – JonW Feb 24 '17 at 13:03
  • 1
    Agree, at the end as a customer what matters is what you end up paying no? If it's taxes or not at least for me it's irrelevant. – André Hess Feb 28 '17 at 14:08
  • 1
    @AndréHess It will be irrelevant to many in general.. Need to check if there is any research on it. – DPS Feb 28 '17 at 14:12
  • For B2C business it is, for B2C is a different story as taxes can (depending on the country, industry, etc) be deducted as an expense. – André Hess Feb 28 '17 at 14:14
  • What's the source of this infographic? – Chriskowalskowski Feb 28 '17 at 14:47
1

Consult a lawyer. Really. In most countries there are strict regulations on how to display prices. In the EU, for instance, consumer prices have to include tax and clearly indicate potential shipping costs nearby (yes, besides every single price tag). There are also regulations for payment options a company must offer, additional fees it is allowed to take, preventing other ways of "tricking" customers to buy additional things (think of pre-checked checkboxed) etc. There are regularly lawsuits about these things. Be careful. For the most part, price display is not a decision a UX designer can take.

  • 1
    Great advice, however in the EU is not mandatory: link: 2. In addition to other information requirements established by Community law, Member States shall at least ensure that, where information society services refer to prices, these are to be indicated clearly and unambiguously and, in particular, must indicate whether they are inclusive of tax and delivery costs – André Hess Feb 28 '17 at 14:11

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.