KEY POINTS:
When Cindy Peterken wants to buy deodorant, she goes online and orders it from Hong Kong.
She likes to buy quality cosmetics and personal care products but finds local retailers prices just a bit too steep to stomach.
Instead she orders from the website www.strawberrynet.com. Her
latest purchase included a Clinique face powder and a Kouros deodorant stick. The latter cost her $26 all up and the postage is free.
"That is compared to $30 tax free at a New Zealand airport or $60 in the [high street]," says Peterken.
Her purchases are automatically gift wrapped and if being sent as a present, can include a card with a personalised message for no extra cost.
It's not that the Peterken family needs to save money. Cindy and husband Fenton own nearly $3m of residential and commercial property in Belgium and New Zealand, as well as the Capricorn Group, which operates four financial services businesses out of Whangarei.
It is, says Fenton, an accountant and financial planner by training, important to spend less than you earn if you want to become wealthy. "A lot of millionaires live quite frugally."
Savings from shopping online can be huge. After taking an eye test last week I was herded to the shop's excellent range of designer frames. The cheapest pair recommended to me cost $550 all up including lenses.
I was left wondering what someone would pay for glasses at an optician in Otara town centre. Without the two hours spare for a round trip to south Auckland, I went shopping online at New York-based www.39dollarglasses.com, tapped in my details and bought glasses fitted with my prescription from Eyezone Optometrists for NZ$67.50 including postage.
Glasses are probably an extreme example of the money to be saved by getting online. But if you keep your wits about you, it's possible to save small amounts of money regularly.
As well as small electronic goods, which are usually much cheaper from overseas, many lightweight items often cost less.
For example, it can be cheaper to order digital photo prints from international websites such as www.foto.com, than it is from some of the cheaper online printers such as Fotopost or DigitalMax.
Even at The Warehouse - "where everyone gets a bargain" - 30 6x4 digital prints will cost you $16.50 excluding the cost of petrol and your time to get to your nearest branch, compared with $13.20 including postage from Foto.com.
Saving five or ten dollars here or there on a single purchase may not add up to much. If, however, you're making such savings every day of the week by shopping around, or cutting back, they can add up to a significant sum of money, says Jeff Matthews, senior financial adviser at Spicers Wealth Management.
Even $10 a week invested at a 7 per cent rate of return with the interest compounded would add up to $35,318 over 25 years, says Matthews. Spend that $10 and you'll have nothing. It's called "lost opportunity cost".
For some shoppers driving to St Lukes, Albany or Botany Downs might just be too much hassle and find it easier to order goods online from New Zealand or overseas retailers.
The sheer variety of goods on offer from international websites can also be a bonus. Kiwis who use online bookshop Amazon.com say that they often save money even when the postage costs are factored in.
Having said that, most budgeting professionals would recommend against buying too many books if you want money left over at the end of the month for savings.
Online shoppers also need to be aware that they could be hit with a GST bill and possibly import duty from NZ Customs & Excise when they buy goods from overseas. Some items such as reading glasses have no duty, others such as sleeping bags, for example, are charged duty.
The trick is that Customs doesn't actually charge the GST and duty unless the total owed amounts to more than $50. That means you'd need to spend $400 in one hit on glasses, for example, before Customs would demand GST from you. A table of charges can be found on Customs website at www.customs.govt.nz.
Shoppers also need to be a little cautious when shopping online, warns former Consumers Institute chief executive David Russell. If, however, they stick to a few basic rules they're unlikely to be ripped off or have goods disappear in the mail.
"Always look for secure payment, make sure you are dealing with a reputable firm as best as you can, and look at their terms and conditions," says Russell.
It can also be possible to complain to consumer protection bureaus in the country you have bought from. The website www.econsumer.gov lists details of how to report your complaint as well as useful online shopping tips for novices.
Good websites will be very clear about their returns policy and have an address and landline that can be contacted. If you do fall foul of "rogues and sham commercial sites" and you've bought using your credit card, you should be able to claim your loss back from the credit card provider, says Russell.
There are a number of international websites that rate retailers, such as www.BBBonline.com, or that enable you to compare prices and write merchant reviews, such as Dealtime.com or Epinions.com.
It has to be said that if everyone took to shopping online then local retailers might suffer economically. But it's not something that worries the Retailers Association too much. The vast majority of people, it would appear, would pay the $550 for designer glasses.
Kiwis tend to treat shopping as a leisure pursuit says John Albertson, CEO of the New Zealand Retailers' Association. "I don't think it will ever come to the point where the internet puts retailers out of business. People want to touch and feel goods."
Local retailers have always have learned to compete with mail order catalogues in the past and the Internet is little different. "Online shopping is another channel. [Retailers] need to aware of it and accept the challenge."
