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Home / Business / Companies / Banking and finance

Local firms see red with bank deal promoting US retailers

Vaimoana Tapaleao
By Vaimoana Tapaleao
Pasifika Editor·Herald on Sunday·
9 Dec, 2017 04:00 PM3 mins to read

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Local businesses are seeing red with a new Westpac bank promotion offering overseas deals. File Photo / Dean Purcell

Local businesses are seeing red with a new Westpac bank promotion offering overseas deals. File Photo / Dean Purcell

With the Christmas season now in full swing, retailers are hoping to see big results as customers rush to buy up large.

But some within the retail business industry in Auckland are seeing red with a new bank deal encouraging shoppers to buy from overseas retailers.

A Westpac Mastercard deal, running until the end of the month, offers customers free international shipping with any purchases of more than US$100 from top American merchants.

Among the list are some of the USA's most well-known companies and brands: Banana Republic, GAP, Nordstrom, Bloomingdale's, Macy's and Old Navy.

Auckland businessman Roger Richardson, who owns The Shoe Lounge in St Heliers, said he felt the promotion was in poor taste.

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"I'm a retailer in this country and we're all trying to make a bloody bob and here's our own Westpac bank supporting overseas retailers who won't be paying - no GST will be charged - and I was pretty disgusted, to tell you the truth.

"They couldn't do a promotion based on the New Zealand retailers, rather the American retailers?

"We're the ones who support the local banks and everything else and here they are encouraging people to spend their money - Christmas money, which we all want a bite of the cherry of - overseas. I thought it was stink.''

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The promotion is in conjunction with global shopping website Borderfree. The site connects international brands and companies to customers from around the world.

Its website tells potential customers: "Unlock free international shipping and start saving today.''

Retail NZ spokesman Greg Harford said they did not have a view on this particular deal.

However, generally, they encouraged customers to shop local whenever possible. The benefits included that they were properly covered by the Fair Trading and Consumer Guarantee acts.

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"But also because by shopping locally - whether you're shopping from a local store in your village community or whether you're shopping from a New Zealand website - you're supporting businesses and keeping jobs and revenue in New Zealand."

Harford said the biggest issue with foreign websites selling goods into the country and marketing into New Zealand was that they did not pay GST on those goods.

As a result, they had an automatic price advantage of at least 15 per cent or sometimes another 10 per cent in duty as well, he said.

"We obviously want people to shop local. But hey, the internet is here and it's a legitimate part of competition in the retail space."

Westpac's chief product officer, Shane Howell, said the bank had always been and remains a firm supporter of Kiwi businesses; helping through various schemes including the Westpac Business Growth initiative, which specifically helps upcoming businesses.

He acknowledged, however, that they also needed to cater to customers' needs when it came to buying overseas.

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"What we have seen, in line with global trends, is increasing numbers of customers purchasing products from companies based overseas. Given that, we also have a duty to provide those customers with other benefits that may suit their needs too."

Richardson, who has been involved in retail all his life - as an importer, wholesaler and owner of a small business - said such promotions did nothing to encourage local retailers; particularly those just starting out.

"Everybody's increasing costs and everything else and just making that a bit harder for the local retailer. Then for a credit card company to come along and encourage them to spend offshore, I think, is just ridiculous."

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