The Price You See Isn’t Always the Price You Pay: How Taxes Shape Shopping Across Borders

By Lia Vered

Price tags were lying to me left and right. Whether it’s buying souvenirs for loved ones or picking up the newest Hollister sweater, spending money is something everyone does. Shopping, one of the most ordinary activities, operates under different systems across countries. As someone raised in Brazil, I found it surprising to expect one price on the shelf, do some mental math, and then discover at the cash register that the final total is higher. This confusion has less to do with currency and more to do with how pricing works. What many people don’t realize is that beyond different currencies, countries also operate under different pricing and tax systems. The price you see is not always the price you pay.

In Brazil, if a dress costs 199 reais, it will still cost 199 reais even after the register. Taxes are already included, allowing consumers to know exactly how much they are spending before they reach the checkout counter. However, this convenience comes with a trade-off. Since taxes are embedded in the price, consumers are often less aware of how much they are actually paying to the government. In Brazil, those taxes are generally higher than in the United States, yet they remain largely invisible at the moment of purchase.

Pricing in the United States (and other regions) works differently, and not because businesses are forbidden from including taxes in the listed price. Rather, it is simply not the standard practice. While lower shelf prices can make products appear more attractive at first glance, there is also a practical reason behind this system. In the United States, sales tax varies by location, with different states and cities applying different rates, which directly affect the final price at the register. This means that if you walk into a Target in two different places in the country, the shelf price of a product will usually be the same, but the total you pay at checkout may differ. The difference is not the product itself, but where you are standing when you buy it.

By separating taxes from shelf prices, large companies can maintain consistent pricing across locations while allowing local tax differences to be applied only at the register. The system prioritizes operational efficiency, even if it requires consumers to do a bit more mental math before completing a purchase.

Across the world’s economies, the smallest details are often the hardest to notice. Pricing systems, though easy to overlook, shape trust, behavior, and perception in ways we rarely recognize until we cross borders. In the end, some of the most important lessons about business emerge in the small moments that force us to question the familiar things around us. Take this as a reminder to stay observant of the details we often overlook.