The thing that I love most about the prices here in Mexico — other than the fact that they tend to be lower than they are in the United States — is that there are no hidden fees or charges. In other words, the price you see is the exact price that you pay — not a peso more.
Unless of course you are able to negotiate it down a bit, but that’s a topic for a different post.
You might be asking yourself right about now, “What about tax? Don’t they have sales tax in Mexico?”
Of course they do, the sales tax here is 16% but it’s already included in the price. As I said — the price you see, is the price you pay.
Comparing Mexico and the U.S.
This is very different from the United States where the price displayed is really just a starting point. You can usually count on additional sales tax and there may even be some substantial hidden fees in there.
Nowhere is this more prevalent than in the world of cell phone providers.
When I lived in the U.S., I once signed up for a $50 a month cell phone plan only to discover when I got my first bill that it was going to cost me about $90 a month. The price increase came in the form of taxes and administrative fees.
When I got my AT&T phone service in Mexico, the listed price was $449 pesos ($24.27 USD). They said that if I paid for 12 months in advance, they would give me 12 months for free, which I considered a very good deal, so I took it.
That comes to $5,388 pesos for 24 months of cell phone service or about $289 U.S. dollars. That’s only a little more than $12 dollars a month.
The price seemed a little too good to be true for a plan that covered all of North America, so when the time came to pay, I honestly expected to see a much higher total full of hidden fees and taxes — I didn’t. The total was exactly $5,388 pesos, as promised. I was amazed.
Mexican Consumer Law
The reason why the cell phone bill didn’t have a single extra charge is simple: Mexican law prohibits it.
When it comes to protecting consumers, Mexico sets the bar pretty high. They have a 101 page federal consumer law called the Ley Federal de Protección al Consumidor.
The section that prevents businesses from charging more than the exhibited price is Artículo 7 bis. Here’s what it says in a nutshell:
All prices must be visible and the exhibited price for a product or service must be the total to be paid and already include all taxes, commissions, interest, insurance, or any other charge required to obtain it.
This is a useful law to know. On a handful of occasions, an establishment has attempted to add some additional fees to my bill. Each time, I responded by quoting this law (in Spanish) to the person in charge, and the charges were promptly removed.
Let’s Wrap This Up
A separate government agency was created to enforce the law and investigate violations. It is called the Procuraduría Federal del Consumidor or PROFECO for short. They have the authority to fine and/or close a business.
Just in case you’re curious, the fine for a violation of the Artículo 7 bis (mentioned above) can range from $521.14 MXN ($28 USD) all the way up to $1,667,647.41 MXN ($90,143 USD).
I think the United States would benefit from a law like this. Even if my cell phone service still cost me $90 a month, it would be nice to know that up-front.