Digital River's hidden charges too taxing for Bitterwallet reader

25 April 2011

If you're a regular buyer of games or other software online, you're probably aware of Digital River - they're middle men who provide e-commerce software to retailers. They're a US company with offices around the world, from where they claim to manage more than $3 billion in global online sales annually.

Digital River also appear to have an interesting way of processing consumer orders - and we'd like to hear from other avid Bitterwallet readers who have had similar experiences to our reader Justin:

"Despite being based in the US and doing purchased-software downloads, Digital River run a European operation.  This means they have to collect 15% tax on all purchases.

"You'd have thought that due to a variety of laws in Europe that would mean including that fact in the check-out charge. Instead, they conceal this charge through the entire purchase process.  Only on the receipt from Pay Pal / Digital River after hitting the BUY button do you find out what you've been charged."

Here are Justin's screenshots to show us what's happening. The first is the confirmation of his order, showing the total amount that Justin will be charged:

Bitterwallet - Digital River Checkout-Basket

There's no ambiguity about that total, no note to suggest the total might exclude tax. Yet the final total isn't what Justin paid:

Bitterwallet - Digital River PayPal

Spot the difference? The issue isn't that tax is being charged, it's that Digital River's software doesn't appear to be displaying the charge upfront. It may be a one-off mistake by Cyberlink, the company Justin placed his order with. Regardless, to have 15% lumped on top of a bill without warning is usually the realm of pretentious restaurants with sow-faced waiting staff offering miserable service.

Have any other readers experience a similar practice, either by Cyberlink or another site using Digital River's e-commerce software?

TOPICS:   Tax

8 comments

  • Justin
    I did contact Cyberlink / Digital River. They bleated the following, after completely missing my point about being up-front on what you charge (rather than just taking the money anyway). I gave up trying to make my point as the automaton's arms are rarely connected to its brain. --- snip snip snip --- Applicable sales tax is automatically computed on both product(s) and shipping costs. For international orders, pursuant to the Digital VAT Directive, as of 1st July 2003, European customers will be charged VAT on all downloadable digital products and services, including software at 15.0%. Any digital products sold into the European Union include a VAT (Tax) charge of 15.0% for most countries. Orders billed to Switzerland are subject to a 7.6% VAT and orders billed to Norway and South Africa are charged a VAT of 0%. (NOTE: If your product is being delivered outside of the EU, you will not be charged VAT once you have entered your payment information.) Any physical products sold into the European Union include a VAT charge. However, the VAT rate, and hence the total price, may alter once your shipping destination has been selected. For customers from Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Spain, Sweden, and UK the national VAT rate will be applied. For all other EU customers, the UK VAT rate of 20.0% will be applied. A VAT invoice can be viewed and printed at the end of your purchase. (NOTE: If your product is being delivered outside of the EU, you will not be charged VAT once you have entered your payment information.) --- snip snip snip ---
  • Matt
    Wow, some people actually pay for Cyberlink software...
  • Noghar
    This also serves to illustrate the fact that PayPal offers you zero protection from being ripped off. If the purchaser had used a credit card he could have kicked up stink with his card supplier as it is against the T&Cs for you to be charged more than you were invoiced. I bought a white PSP the first time they came out from an online seller who quoted one price then added another £20 when the payment was processed, on no grounds whatsoever. I moaned at the credit card people, emailed them a copy of the invoice, and got the £20 back. I don't know who paid it in the end - the seller or the CC company - and I don't care. But try doing that with Paypal and see how far you get.
  • Justin
    Hmmm - I believe in supporting any company produces something good. Power Director is the only video editing software I've found that not only doesn't crash when editing but supports AVCHD. Shame Cyberlink can't get their head around the other aspects of running a business.
  • Tony
    Simple way around this, Clear cookies provide a US address and pay no tax :-) has worked for me qutie a few times. Last purchase was Magic ISO And got a full refund becase support did send full key. P.S if any of you want my licence key fro free let me know
  • Alex
    E-commerce has always been taxed in the regime of point of purchase, not point of sale but if you hit purchase and you are charged a different amount than you agreed to pay, that's theft. The normal course of events sees the retailer have to assume that the amount they've said they'll charge is the gross amount, and pay the VAT out of that, so in this example Justin should have been charged the original £42.49 and Cyberlink would be deemed to charge £5.54 VAT from the £42.49. That's of course if the order process doesn't have ex taxes slapped all over it.
  • Ten B.
    [...] Digital River’s hidden charges too taxing for Bitterwallet reader [...]
  • VAT
    The screenshot shows a unit price of both GBP49.99 and 42.49. This is confusing. Why 2 prices? Is the GBP49.99 the price with 20% VAT added?

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