Two local shipping companies claim they can get goods from overseas to the Island significantly cheaper than the many companies who ship direct to Bermuda via the Border Free website.

Both Mailboxes Unlimited and BEST Shipping are warning that importing buyers should beware of being overcharged for duty and of heavily marked-up product prices for international customers.

Border Free counts firms such as Nine West, J Brand, Pottery Barn, Lane Bryant, Barneys New York, Hue, Brookstone and Sephora among its clients.

These companies and many more are offering direct international shipping via the company.

Border Free, speaking to prospective retail customers on its website, states: “Going global is as simple as pairing your current website with our behind the scenes expertise. Our end-to-end solution breaks down borders and all barriers to sell your product where it’s never been sold before. And done with the least amount of effort on your part. Customers are greeted in their own language. There is local pricing, local shipping options, and payment options they are accustomed to using. Border Free lets shoppers in other countries feel welcome to interact with your brand and ultimately, purchase your product.”

It continues: “Different country, same online experience. Even though you are in multiple countries, with multiple currencies, you still present to each consumer a friendly, localised shopping experience, one catered to them — and fully automated based on their IP address.”

Steve Thomson, who owns Mailboxes Unlimited Ltd and its sister business US Express, a package forwarding service, learned of the issue through a customer, whose wife was attempting to purchase a sweater online.

Mr Thomson explained she went to the website of clothing retailer Tommy Bahama, where she found a sweater which cost $98 which she decided to purchase. Once she indicated she was a customer from Bermuda, she found the price of the sweater had jumped to $117.60. At the website’s checkout, $15.51 was cited as the duty that would be owed on the item once it landed in Bermuda, and that cost was listed in her billing.

Mr Thomson pointed out that duty on this item should be 7.75 percent, or just $7.60.

With a shipping charge of $19.99, the final tally for the sweater, via Border Free, came to $153.10.

Mr Thomson said that the cost via US Express would be the US residents’ price of $98 for the sweater, $1.96 for insurance, and the duty at $7.60. His shipping costs would be $21.75. The total — $129.31, a difference of $23.79, or 18.4 percent.

Shocked at this outcome, Mr Thomson went online and experimented for himself.

On Overstocked.com, he followed the process as if he was buying a Vizio E320 AO 32-inch flat screen television.

Once on the popular website, he found the television priced at $243.33. However, as soon as he was identified as an international customer, the price changed to $329.95 — a difference of $86.62. At the checkout stage, he realised he had been redirected to the Border Free website, which listed duty and taxes of $117.86, and a shipping cost of $43.60 — making the final cost to the customer in Bermuda $491.41.

In the US, the same flat screen television would land on a person’s doorstep for just $246.95, with a shipping charge of just $2.95.

Shipping into Bermuda is inevitably more expensive, and Mr Thomson said: “I can assure you my shipping will be more than $43 — it will probably be more than $100 — but I will save you a bomb on the Border Free duty and Border Free price.”

Mr Thomson then did the maths, and found that with a first cost of $243.33 — rather than the Border Free international customer price of $329.95 — duty would be just $55.14. He also found, using the “worst possible example”, that he could bring it in via US Express for $153. The total cost — $451.47, compared to the Border Free cost of $491.41 — a difference of $39.94, or 8.8 percent.

Mr Thomson said: “It’s a case of ‘buyer beware’. These companies which are shipping to Bermuda are actually marking up the price of goods by a significant percentage, as high as 30 or 35 percent, and then showing a great deal on shipping.

“The negative for us in Bermuda is you pay duty on the cost of the item, so you are paying a much higher duty than you need to, on a much higher first cost.” Even then, Border Free is charging more for duty than the official rate.

“The scary thing is, you wouldn’t naturally be able to tell you were in the Border Free part of the website,” he said, and alerted would-be purchasers to check in the top right hand corner, which will indicate, possibly via the Bermuda flag, that you are in the international section.

He speculated that the inflated product costs and duty costs were to allow for artificially lowered shipping costs, to seem like a much better deal than offered by local shippers.

BEST Shipping’s managing director David Sousa said: “I’ve had a look and, yes, I can agree with Steve — those websites are misleading to the importer here in Bermuda.

“It ends up being more expensive having shipments shipped directly to Bermuda by the vendor than having it shipped by our services.”

Disclaimer: Steve Thomson is a member of the board of directors of Bermuda Press (Holdings) Ltd, the parent company of The Royal Gazette.