What I Love About the Prices in Mexico

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.

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About the Author

Q-Roo Paul
Paul Kurtzweil (Q-Roo Paul) was a deputy sheriff in Florida for 25 years before retiring at the rank of lieutenant in 2015. He and his wife moved to Mexico looking to maximize their retirement income. They later started a blog called Two Expats Mexico (qroo.us) to share their experiences, as well as information about the logistical and legal aspects of retiring south of the border.

35 Comments on "What I Love About the Prices in Mexico"

  1. Patricia Armstrong | January 25, 2018 at 8:40 am |

    Didn’t know that Paul, good read, that’s one thing I’m uneasy about, I have T-Mobile and have had the same # for over 16 years and kinda want to keep it, 75 monthly but have heard if T-Mobile hears u r living there full time they will cut off service.. Well off to the dentist, u and Linda have another great day in paradise ☺

    • We were told the same thing when we first moved down (we had T-mobile) but they never turned it off. Once we found a much cheaper plan that covered all of North America, we dropped the T-mobile plan.

  2. Hey there – love your blog! Wondering where you purchased an AT&T plan here in Mexico for pesos. That’s an awesome deal. And how many gigs does that include per month? Always looking to save dinero amigo – Gracias.

  3. peter grill | January 25, 2018 at 8:58 am |

    Hola QP, We own a home in Bahia Kino Sonora. I’ve enjoyed your blog for it’s common sense view of life in MX. ( No uncle Fred there are no beheadings on our beach nor are our neighbors drug lords. Just go back to Miami where you are safe) I was curious what documentation is needed to bring a dog to MX. Do you know if it is the same in each state >

  4. Holly Chrisco | January 25, 2018 at 8:59 am |

    I love this! So much easier to budget, especially for large purchases. Thanks again for another great post, Paul. And, wow, those mattress prices are awesome!!

    • One of the things that surprised us most when we first moved here was how inexpensive the mattresses were. It’s insane!

  5. Paul, is it the same for cars and motorcycles?

  6. Baja Prince | January 25, 2018 at 9:39 am |

    I find the article to be pretty true in my area but it’s still a good idea to pay close attention to the IVA on things where it says the IVA is included in the price. Many restaurants are notorious at tacking on an IVA charge to the bill even if the menu clearly says prices include IVA. Not all places do this but enough do, so keep an eye out for that.

    In many areas, stores list prices but then IVA gets added to the total bill at the end. This can be an unpleasant surprise for those who get “introduced to IVA” in this manner. Be aware and avoid being surprised.

    On a semi related issue, and one that could potentially open a can of worms, there is a widely practiced pricing system that includes a “gringo tax”. This is just to charge extra to outsiders and is very common with services purchased. Knowing Spanish can help a ton in avoiding or contesting this.

  7. Paul,
    Do you know how this may apply to car rental? For example, when I rent a car in Cancun the shown cost per day from the website reservation is often approximately $20, but they ALWAYS insist on adding $20-60 per day in insurance fees when I arrive at the car rental office in Cancun. This happens with all companies.
    Regards,
    Brian Degeer

    • It does apply to car rental companies. In fact, it’s not uncommon to see articles about PROFECO sanctioning car rental companies for various infractions.

      When it comes to insurance, the law says that the amount advertised must include all fees, including the insurance. Many Mexican people that I have spoken to about this subject said that the car rental fee includes the bare minimum required by law. That doesn’t mean that you won’t be left without any liability issues. That’s the purpose of the additional add-on insurance options.

      I will probably do an article dedicated 100% to this topic in the future.

  8. Charles L Twist Jr | January 25, 2018 at 9:43 am |

    I whole heartily agree that there ought to be a law written like this for the USA, but only after 10 other absurd laws are taken off the books.

    Thank you, for this very informative and useful information.

  9. Charles L Twist Jr | January 25, 2018 at 9:48 am |

    Would this law, likewise, apply to vacation condo rentals? The place I’m looking at for this July is around $130.00 USD per night as shown on their web-site. OH, and they adjust for the exchange rate when final payment is due.

    • It applies to hotels etc. Things can get tricky when exchange rates are involved. No one wants to absorb the potential loss if things change down the road.

  10. Hi Paul
    Once again, very informative article. Thank you.
    Do you know if AT&T would let you port your US number to a new cell phone in MX? Or would you have to get a new Mexican number?
    Thanks
    Bob

  11. Hi Paul………….Did you get your AT&T cell plan at a Telcel store?

  12. Hi Paul Always Great information that you share. I also wonder about vacation rentals

  13. Great article Paul. I am wondering about restaurant service? When we go out we always leave a tip but I’ve had bills where they underline the words, “It does not include tip”. Tx

    • In Mexico, it is illegal for businesses to include a mandatory tip into the bill. Tips are always voluntary and I always encourage people to tip very well. 🙂

  14. ALL the dive shops post prices that are cash prices, If you pay with a credit card THEN they add the 16% tax to the price, otherwise they don’t.

  15. Thank you, interesting and timely information for me. I’d definitely appreciate your doing an article regarding car insurance.

  16. So, Paul. In the case above of the dive shops tacking on tax on top of the tax-included price being illegal, what’s one to do? Threaten to contact PROFECO?

    • That’s what I do. Or, you can choose another dive shop or you can report them to PROFECO.

  17. Thank you for the info. Same rules apply in ALL Mexico, correct? Is 16% sales tax throughout all of Mexico (Baja)? Thank you for the pix of prices of the beds!!! Wow, looks like great prices! I’ll be getting bed and couch when moving in December. Thx. Curious, I’ll be bringing my cell phone which is unlocked with space for two SIM cards. I can go to like an OXXO Store to get a card and plan? Love your blogs

  18. So with the ATT plan, did you have any issues with Your US family and friends calling you on your Mexican phone if they don’t have a plan that includes Mexico for free?

  19. This is great information, thank you!

  20. Tom G Thomas | February 28, 2018 at 2:52 am |

    Did you ever answer Donna N on Jan 25th, 2018?? Very interested in this subject. Can this phones be used in the USA to call MX for no charge?? Can they be used in the USA to call anywhere in the USA for no additonal charges??
    Thanks, Tom

    • Sorry, we don’t always have time to review all the comments on the posts.

      To answer your question: yes, you can use the phone to call anywhere in North America at no charge. The phone works when you are anywhere in North America.

      The only problem is that you will have a Mexican phone number which means that people who call you from those countries may have to pay long distance rates, depending on the term of their phone service.

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