Macromedia: Rip off Britain !!

kbeattie

In the last week at my place of work, I had to renew an annual subscription to Devnet, which is a service for providing development and software updates from Macromedia, one of the world's largest software companies. They produce Dreamweaver, Flash, Fireworks, etc.

The renewal price was $599 (US Dollars) so I went online to the renewal site in the US store. This works out at £332 (£391 when you add on the VAT).

The US Store said that as I was in the UK, I had to order it through the UK store which I then went ahead and did.

The UK store were charging £459 + VAT !!!

When the invoice was produced, it stated that the VAT rate was 19% (I assumed UK rate was 17.5%).

Therefore ordering from the UK would cost a total of £546.21, a difference of £155 !!!

It even stated that this included shipping yet all I was to get was an email with a renewal code on it.

RIP OFF !!

I sent an email to Macromedia asking why we in the UK had to pay nearly 40% more than in the US and also queried the VAT rate of 19%.

Here was their reply:

Your Macromedia Customer Number: xxxxxxxx

Dear Mr xxxxx

Thank you for contacting Macromedia Customer Services.

Further to your email of 19/10/2004, Macromedia's pricing is based in estimated street prices in the countries concerned and not on exchange rates, the same as with the music industry or fashion industry etc. Most multi-national companies use the same basis for setting prices.

The way estimated street prices are worked out is generally driven by the distribution and reseller channel in the countries concerned, which reflect the actual prices being paid by the customer on the street. The online store prices are an average of these channel prices, sometimes a little higher and sometimes a little lower.

Furthermore, we would advise that European customers purchase on one of European Online Stores, so that we can offer you an effective purchase experience in local currencies, local languages and provide you local VAT at the appropriate rates:

In the UK Online store: 17.5% for box-products - 19% for downloads In the German Online store: 16% for box-products - 19% for downloads In the French Online store: 19.6% for box-products - 19% for downloads In the rest of Europe store: 19% for box-products and downloads (Macromedia's Euro Online Store is registered for VAT in the Netherlands)

As for your enquiry regarding the VAT rate which has been applied to your order, since you have ordered a renewal of a Devnet subscription which is available as a download, indeed the VAT rate applied will be of 19% and not 17.5%.

From the 1st July 2003 all European Union Member States are required to implement the E-Commerce Directive regarding Value Added Tax (VAT) on "online services". As a result of these changes, customers resident in the European Union must be charged VAT on their online purchases.

Since Macromedia is VAT registered in the Netherlands where the VAT rate is 19%, we have to apply this VAT rate on the purchase of downloads for all European Residents.

If you have any further queries, please do not hesitate to contact us again.

Kind regards

Caroline Renard
Macromedia Customer Service

Tel: +44 (0)131 458 6766
Fax: +44 (0)131 458 6765 <http://www.macromedia.com/support/service>
<http://www.macromedia.com/support/email/cs/main.cgi?lang=UnitedKingdom&slan
g=UK>
PLEASE INCLUDE YOUR CUSTOMER NUMBER AND ALL PREVIOUS CORRESPONDENCE WHEN REPLYING.

Does anyone out there want to comment on the extra cost or the VAT issue?

paulcdb

Well while people still pay sky high prices, these companies will continue to charge appropriately.

Same thing with movies music, etc and think as more people get CD/DVD writers they are now seeing how little it costs to manufacture them... yet were still charged over the odds and then they wonder why there's piracy >:(

So until people voice opinions with wallets and not just a few words nothing will change... and we'll continue to be ripped off! IMHO :-/

kbeattie

The difference here is that at least I can order CDs/DVDs online from the US/Canada at their cheap prices AND not have to pay their VAT.

With Macromedia, you have to buy from the UK store at this inflated price; you are prevented from ordering on the US store at the dollars price.

Ths is where the Rip Off occurs.

System

If you want the full detail on the VAT issue, have a look at http://www.hmce.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageHome_ShowContent&id=HMCE_CL_000925&propertyType=document although I wouldn't recommend it unless you are very very bored.