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Since the very beginning of accepting EUR payments in 2002 I often see there is the same EUR price value as original USD price.

Many international suppliers, stores, e-shops offer the same stuff in US and Europe. Price tags are exactly the same, but currencies are different.

For instance, there is a stuff selling for $59.99USD in the US but it will be at €59.99EUR in EU.

But in the UK the price will be always correct, say (59.99/1.6)=£37.49GBP.

This usually happens with international stores located and registered independently in the US, UK and EU.

So, why $59.99USD = €59.99EUR for EU, but £37.49GBP corresponds the exchange rate in the UK?!

This usually doesn't work with on demand currency conversion option where available on websites, because the actual billing currency is the only one based on actual e-shop location (UK — GBP, US — USD). The currency conversion looks just as a helper option in this case, these are not real billing prices.

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Welcome to Money.Stackexchange.com sublay. Can you provide an example of what you're referring to? –  C. Ross Jan 5 '13 at 19:30
An example would be the Macbook Air, selling at $999 and at EUR 1049. While here the prices aren't exactly the same, EUR 1049 is clearly much more than USD 999. My short answer to the question would be: Because they can. –  Lagerbaer Jan 5 '13 at 23:10

2 Answers 2

up vote 2 down vote accepted

The simplest answer would be: Because they can. Why charge less for something if people will pay more? One example are Apple products. While there the price number is not exactly the same in EUR and USD, they are so close that, effectively, the EUR product is more expensive.

Many things go into a price. There might be reasons for products in the EU being more expensive to produce or distribute. Or people in the EU might be in general more willing to pay more for a certain product. In that case, a company would forgo profits when they offered it cheaper.

Also, prices are relative. Is the USD price the "correct" one and the exchange rate should dictate what the EUR price is? Or vice versa?

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Seems you are right. There is no efficient explanation at all. For me in Russia USD seems to be always correct, because it is more worldwide than EUR (Asia, Brazil, etc) and is almost always lower than EUR including shipping :) –  sublay Jan 6 '13 at 20:35

It's mostly VAT (value added tax or sales tax). For example an US IPad is $499 without tax, and a German IPad is EUR 499 including 17% VAT. The base price is actually only EUR 417.

In addition to that, cost of business is a little higher in Europe because of tax structures and because smaller countries cause higher overheads.

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Thank you! Quite interesting point of view. And it explains only local store price lists, not worldwide trading via internet. –  sublay Jan 6 '13 at 20:38

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