(Argentina) Crossing into Chile for shopping is profitable again

The pandemic has put on hold the possibility of accessing hundreds of much cheaper products in the trans-Andean country. With the reopening of customs crossings in May, thousands of Argentines cross daily to make up the difference. In tyres the price gap is up to 460%.

The inhabitants of Río Negro and Neuquén know in detail an old tradition. That of crossing to Chile on a shopping trip, taking advantage of the huge price gap that exists in countless products due to the exchange rate difference. The average profit generally exceeds 100%, but in many cases it exceeds 200% and in specific items it is up to 460%.

The pandemic that struck in early 2020 interrupted the possibility of travelling to the neighbouring country for more than two years. Finally, on 1 May, the borders were reopened, and thousands of Argentines once again found the opportunity to access hundreds of products at very affordable prices, and even find items that are banned in Argentina due to import restrictions.

Much cheaper in Chile

A quick look at different articles immediately reveals the notorious difference in the value of identical articles, of the same make and model, which can be purchased at a significantly lower price just for crossing the border. Each Argentine peso is currently equivalent to 6.8 Chilean pesos. The calculation for the conversion is therefore the nominal price in Chilean pesos, divided by 6.8.

In the technology sector, the star products are smartphones. The well-known Samsung S21 with 128 GB of memory can be found in the Falabella shop for the equivalent in Argentine pesos of $73,527. The same device can be purchased at Mercado Libre Argentina for $174,999. The price difference is 138%.

The iPhone 13 Pro Max with 256 GB of memory is available in Chile for the equivalent of $142,645 Argentine pesos. In our country the same device sells for $351,126, a gap of 106%.

Telephony. The difference in the prices of equipment is well over 150%.

The World Cup in Qatar is coming and one of the most sought-after products are televisions. A 55′ LG OLED TV is priced on the other side of the border at $142,645 Argentine pesos. Argentine shops sell the same TV (same model and brand) for $250,000. The difference is 75%.

As for footwear, a pair of Adidas X9000 L4 trainers, both for women and men, costs $10,292 Argentine pesos in Chile. On this side of the border, an identical pair costs $29,990, i.e. 191% more.

Thinking about Father’s Day, the price gap is very considerable.

A Phillips model S1121 shaver can be found in a Ripley shop in Chile for $2,645 Argentinean pesos. In Argentina, the same item of identical make and model costs $6,599. That’s 149% more.

Smartwatches are another favourite gift for dad. The Huawei GT 2 smartwatch can be bought in Chile for $14,704 Argentinean pesos. On this side of the border, Mercado Libre offers it for $34,999, 138% more expensive.

Mobile phones, tablets and notebooks are considered personal use items and are exempt from paying taxes. The same applies to clothing and footwear. The recommendation is to buy small items for individual use.

Finally, one of the most sought-after items by Argentines in Argentina is tyres. Due to import restrictions, there are tyre types and models that are not available in Argentina. But those that are available in the country cost two or even four times more expensive than in Chile.

Just to give two examples, the Bridgestone 205/60 R16 tyre that costs $17,939 Argentinean pesos in Chile costs $58,940 in Argentina. The difference is 228%.

Meanwhile, the Goodyear 265/60 R18 Wrangler AT, used for vehicles such as the VW Amarok or the Toyota Hilux, costs $25,057 Argentinean pesos in Chile while in our country it is sold for $141,844. The price difference is a whopping 466%.

Regarding tyres, there is a restriction imposed by AFIP that requires a safety certification for automotive spare parts before entering the country. Tyres do not have this authorisation, and therefore if customs detects them entering the country, they can apply fines and even confiscate the goods. However, Argentines looking for tyres in Chile generally change them on the other side of the border, which makes it difficult for new tyres to be detected once they are covered in mud and snow.

Before travelling to buy, there are at least two things to be clear about.

The first is that Resolution 3751/1994 of the National Customs Administration establishes the limits on purchases that can be made abroad and brought into the country without paying taxes. However, small items such as mobile phones, tablets or notebooks are considered items for personal use and are exempt from paying taxes. The same applies to clothing or footwear. In order to avoid problems, the recommendation is to buy small items for personal use.

The second is that purchases made abroad with credit cards are counted by banks in dollars and then converted into pesos at the official exchange rate plus taxes (30% Country Tax + 35% Advance Income Tax). It is important to bear in mind that the exchange rate used is not that of the day of the purchase, but the one in force at the closing date of the credit card statement.

It is a good option to get the currency before the trip, either in dollars or by acquiring Chilean currency in Argentina. Once in Chile, the value of Argentine pesos is lower.

Fact: 466% is the price difference that can be achieved when buying the tires of a van in Chile.

Author: Diego Penizzotto. Rio Negro