To include or exclude… That is the question

[Alex Honey: Int Design]

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Hello fellow solos

I have a bit of a quandary that I’m hoping the sharp minds
and abstract thinkers in here might be able to settle for me.

On my website I put prices on any of our services that we
offer for a set price. This helps dispel the preconception that
design is expensive, especially for new clients or ones who haven’t used
a designer before.

However, the thing I’m not sure about is what to do with the
GST. Do I put the prices as $200.00 + GST? Which many have said makes
them seem less. Or do I just include the GST machining it read $220.00?

If I go with the second option do I need to state that it includes GST for
purposes of clarity?

The third option would to put them as excluding then add
a line at the bottom stating that they exclude GST.

I’m not so in favour of this as there’s always a chance someone
doesn’t read all the way to the bottom or simply doesn’t remember
that they read it. I’m in to being transparent about prices so
it doesn’t appeal as much.

So my solo heroes what do you think? Should we include? Should
we exclude? Or do we disclaimer?

I look forward to seeing what the consensus is.

[AdvancedPetSitting]

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I also have all my prices on the website and they are all GST inclusive. Then at the end of the 3 months my accountant works out how much of my income is the GST component.

[Cesar]

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Hi Alex,

To make it simple for the customer I would put the price+GST that way you are upfront about the cost. It’s easier for the customer to understand and for me personally when I purchase something I like to see pricing+GST.

Have a nice day Alex…

BTW, my new unit (off the plan) will be finished in a few months and I will be needing your services. I’ll be in touch and bookmarked your site.

[JaneB]

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I like to see the whole price with a statement that GST is included.

[MyGreatIdea]

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I agree with Jane…I like to know what I’m going to be paying. I would go for the $220 (inc GST) option.

I assume the majority of your clients will not be claiming GST anyway, so to them they just want to know their cost without having to calculate and add GST.

Wendy

[sixx]

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Inclusive for an advertised price, exclusive for a quotation.

[Alex Honey: Int Design]

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Thank you all so much for your valuable thoughts and comments.

It seems like there’s a bit of a mixed bag of opinions, with the inclusive $220.00 (inc GST) option being the overall winner.

So I’m going to go that way. That is until GST is revoked and we can go back to the “old” days when a dollar was just a plain old dollar.

Oops showing my age there!

Thanks again for your efforts

[Stuart B]

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I get really bummed when I buy something and see that I’ve been charged extra for the GST. People generally don’t get excited about hidden costs, plus if you include GST you can make a feature about it like “GST included, nothing more to pay!”

[HammockFG]

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I’m another that likes to see the whole figure up front. Nothing worse than working out all your costings and then realising the figure didn’t include GST. You feel a bit cheated somehow…

[Alex Honey: Int Design]

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Thanks Lemon Chip and Hammock

Im always up front about our fees/charges and have yet to have a single issue with a client not being clear
about what the costs are, so your comments reflect my thoughts exactly.

Thanks for taking the time to help me get my thoughts straight

[AgentMail]

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I have always had the opinion that business transactions be +GST and consumer be inc GST – don’t know why, but when I walk into a clothes shop to by a shirt, I expect the price I pay to be the one on the tag, but if I am buying a toner for my printer, I know the cost will be + 10% for GST

[Alex Honey: Int Design]

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Hi AgentMail

I am exactly the same myself, which comes from working with trades people and wholesale suppliers etc.

But I’d never think of the GST content or expect to see it added to the cup of coffee I buy!

Just goes to show how adaptable we humans are.

Cheers

AgentMail, post: 79074 wrote:

I have always had the opinion that business transactions be +GST and consumer be inc GST – don’t know why, but when I walk into a clothes shop to by a shirt, I expect the price I pay to be the one on the tag, but if I am buying a toner for my printer, I know the cost will be + 10% for GST

[marketingweb]

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AgentMail, post: 79074 wrote:

I have always had the opinion that business transactions be +GST and consumer be inc GST – don’t know why, but when I walk into a clothes shop to by a shirt, I expect the price I pay to be the one on the tag, but if I am buying a toner for my printer, I know the cost will be + 10% for GST

Hi Alex,

I’m probably a bit late to the party, but in my experience the standard is exactly as AgentMail says:

– If you are dealing with consumers as any significant percentage of your market, INCLUDE GST. If it’s obvious it will be included (like a cup of coffee – a 100% consumer product), no need to state this. If there is any change of confusion – state incl GST.

– If you are dealing for the vast majority with business to business sales, DO NOT include GST.

There IS I believe a logic behind this rather than just humans being adaptable though. The thought process behind it simply that GST is a consumer focussed tax – in essence it is only paid by the final consumer of the product. It IS charged on each transaction, but in effect “claimed back” by businesses as input credits.

Or to put it more simply – a consumer’s “true cost” of a product or service includes the GST – so it should be included.
A businesses “true cost” does NOT include the GST, as they can in most cases claim it back. In this case it can therefore be argued that GST is something they have to pay out in cash initally, but is not part of the final cost of the product to them. For this reason it’s become the defacto standard to list +GST.

I also believe it is the law that GST inclusive prices need to be advertised on all B2C products, but not B2B – perhaps someone else can confirm this also.

Hope this helps,
Matt

[IgniteDM]

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Nothing irritates me more to get a price only to discover that ‘gst excluded’ was in fine print somewhere that I didnt notice it.

I expect that when I see a price – its the total price of what Im going to handover. I expect that will include GST – its not like it can be escaped!

Im busy enough – some days my brain cant handle working out what the gst is on top of an advertised price! Those days Im flat out remembering that the milk goes in the fridge and not in the pantry!

My vote is to put the complete price with ‘inc gst’ somewhere on the page.

[marketingweb]

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IgniteDM, post: 79602 wrote:

Nothing irritates me more to get a price only to discover that ‘gst excluded’ was in fine print somewhere that I didnt notice it.

Putting GST excluded in fine print is actually illegal.

There are only two legal ways to do it as I understanding.

1) Include it in the price (with or without specifying – if not specified, then it is assumed to be included)

2) Write as literally +GST (ie Price – $150+GST)
This is only acceptable for business to business sales and in my experience is the standard way of doing things for B2B.

In the end as small business people, we should be working to what the “standard” is, not what we “like” personally.

Matt

[Author]

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