Apr
19
The Myth of Gringo Prices in Peru…
One of the biggest complaints you will hear from tourists and expats alike is the practice known as ‘Gringo Prices.’ First, what is a Gringo? That depends on where in Latin America you are. In Brazil for example the term is used to refer to ANY non-Brazilian. In Peru, it is generally used to describe fair skinned tourists who do not speak Spanish. Second, what are ‘Gringo Prices?’ Gringo prices are the perception that one is being charged more that a local(Peruvian) would for the same goods or services. In actuality, it is on the consumer to know how much things should ‘really’ cost. So, there is no such thing as ‘Gringo Prices’ just uninformed consumers.
Have I ever been ripped off due to my ignorance? Yes, in fact, I have. The second day I was in Pucallpa, many years ago, I decided I wanted to take a Motokar to the Plaza de Armas, about 9km. At the time it should have cost about 1.50 to 2.00 soles. I paid 10! Was that a gringo price? No, it was what I agreed to, not knowing how much things should cost. After I told my friends what happened, they laughed and told me how much certain things should cost. So here are several common sense ways to avoid being overcharged in Peru.
How can you avoid being over charged?
Trust me, a Peruvian will over charge their fellow countryman without hesitation. These tips apply to anywhere in Peru, not just Pucallpa.
- First step, getting informed. Ask people you know locally how much they pay for things and where they shop, who they use to do repairs, how much they pay for building supplies, etc.
A great online resource for many goods offered for sale in Peru is: www.mercadolibre.com.pe
You can use it as a reference against what you are being quoted by your local merchant.
- Gather information. Go shopping! But don’t buy anything until you watch and listen to what other people are paying for things. Great places to practice, the public markets, artisan markets, computer markets, print shops, people catching a Motokar or taxi, etc.
- Pay cash, carry change. After all that work, you will need to pay in cash or face a surcharge for using a credit charge, which most likely with negate any savings you have negotiated!
- Bargain. Bargaining for better prices is a way of life here. My wife doesn’t buy anything without first asking for a discount.
- Walk away. Never accept the first price they quote you, unless you know that is what the item should cost. If they don’t want to lower the price, walk away and listen to how fast the price usually drops.
- Price check. Check around at 5 or 6 places before making your purchase. Peru is infamous for its clusters of similar businesses selling the same products. This is a quick step and can save you some money.
- Buying in bulk. Ask for bulk purchase discounts, many merchants and vendors offer them. If you are buying a lot of a particular item or product, you will almost certainly be able to ask for and receive a discount. Why pay 3 soles a kilo for rice when you can buy a 50kg sack for about 2.20 soles a kilo. Sugar and other staple foods are the same, buy in bulk and save, you will use it, and if properly stored last for months.
- Airline tickets. Like other countries, it pays to book ahead, at least 21 days here. There are currently two airlines that charge a surcharge over their base fares to all non-residents of Peru. They are currently: LAN Peru and TACA. The fee is USD$178.50 round-trip for all domestic flights on those carriers. A few other options include Star Peru, great planes, great service, good prices. Their flights are about 85-90% Gringos. Peruvian Airlines is also an option but I would personally take Star over PA. Being a legal resident of Peru has some advantages.
- Bus Tickets. No advantage to booking ahead, just show up and buy your ticket. You may want to plan ahead of major holidays here. The rates vary with the season, so check around. Several of the more reputable companies have websites that show their current fares.
- Paying online. You can pay for many things online here. You would be advised to enroll your Visa card in the Verified by Visa program as many Peruvian sites will not accept a Visa charge without it. Never use an internet café or a computer you have not scanned for viruses. I recommend Microsoft Anti-Virus. It beats McAfee and Symantec(Norton), PANDA, etc… Others don’t even come close, hands down. It is free as long as you have a valid license for the Windows operating system you are trying to install it on.
What about large projects, like construction?
Again, ask around. Find out what people are paying. Ask to see other jobs the company has completed. Talk to the owners of the building and see how they like the companies’ work. You can’t always satisfy everyone, but doing some basic checking will go a long way toward the successful completion of your project. Buy all the materials yourself, contractors will pass along a little profit for themselves if you don’t. Plus, you need to make sure you control the materials on the project.
What about cars and other vehicles?
New car dealers usually post their prices, but just like in the US, there is always room for negotiation. If you are able to make the purchase in cash, expect to save 5-10%. If you are here for the long term or short term, and must have a car, don’t buy used. There is really no advantage to buying used here anymore. New car prices have plummeted in recent years to due to more choices for consumers and greater demand. Coupled with more relaxed laws for the import of new vehicles by manufacturers has also helped in lowering the cost of new vehicles in Peru. You will rarely save any money unless you buy something that is 15 years old or more, then you need to think about the cost of maintenance.
