Money & Shopping in United States

North AmericaUnited StatesMoney & Shopping in United States

Official currency

The official currency of the United States is the US dollar ($), divided into 100 cents (¢, but often written in decimal dollars). Foreign currencies are almost never accepted, although some large hotel chains may accept travellers’ cheques in other currencies. Most establishments near the Canadian border accept Canadian currency, though usually at poor exchange rates; some large shops may accept Canadian currency up to 100 miles (160 km) from the border. The Mexican peso can also be used (again at poor exchange rates) in border towns such as El Paso and Laredo, but rarely outside the immediate area.

The dollar is sometimes colloquially referred to as a “buck”, so that “5 bucks” means 5 dollars. Common US banknotes are the $1, $5, $10, $20, $50 and $100 notes. The $2 note is still produced but is almost never in circulation. Notes over $100 have not been produced since the 1960s and are withdrawn from circulation when found. The $100 and sometimes $50 notes are too valuable for small transactions and can be rejected. All $1 and $2 notes, as well as older notes of other denominations, are greenish and printed with black and green ink (hence the nickname “greenbacks”). The newer versions of the $5, $10, $20, $50 and $100 notes are slightly more colourful. All notes are the same size. The notes never expire, and multiple designs of each note can be circulated together, but older designs that lack modern anti-counterfeiting features may (rarely) be rejected by some retailers.

The standard coins are the penny (1¢, copper-coloured), the large nickel (5¢, silver-coloured), the small dime (10¢, silver-coloured) and the sharp-edged quarter (25¢, silver-coloured). These coins only have their value written in words, not numbers: “one cent”, “five cents”, “one dime” and “quarter”. As far as value is concerned, size is irrelevant: The dime is the smallest coin, followed by the penny, nickel and quarter. Half-dollar coins (50¢, silver) and dollar coins ($1, silver or gold) exist but are not common. Vending machines generally accept only nickels, dimes and quarters, and $1 and $5 notes, although some accept $1 coins; larger machines, such as those for buses or stamps, may accept $10 or even $20 notes. Although Canadian coins are similar in size, the machines usually reject them. People, on the other hand, usually don’t notice (or care) about a few small Canadian coins mixed in with American coins, especially in the northern parts of the country. As with most currencies, the coins are usually not exchangeable abroad, and UNICEF has donation boxes at the airports so you can get rid of them for a good cause before you fly overseas.

Currency exchange and banking

Exchange offices are rare outside the city centres of major coastal and border towns and international airports. Some banks offer a money exchange service. Many bureaux de change at major US airports are operated by Travelex or International Currency Exchange (ICE). Due to the high expense of exchange rates and transaction fees, it is often best to purchase US dollars in your home country before travelling.

Opening a bank account in the United States is a fairly simple process and there are no restrictions on foreigners having a bank account in the United States. The “big four” retail banks are Chase, Bank of America, Wells Fargo and Citibank. The other big banks are US Bank and PNC. Many areas of the country, such as Hawaii, are underserved by the big retail banks and dominated by local banks.

- Advertisement -

ATMs can process foreign bank cards or credit cards with the Visa/Plus or MasterCard/Cirrus logos. They usually dispense $20 notes and charge about $2 to $4 for cards issued by other banks. Smaller ATMs located in restaurants, petrol stations, etc. often charge higher fees (up to $5). These fees are in addition to the fees charged by your card issuer. Some ATMs (e.g. at Sheetz petrol stations and in government buildings such as courthouses) are free. Like everywhere else in the world, there is a risk that these machines have skimmers installed that can steal your credit card details.

Another option is to withdraw cash (usually up to $40-60 more than the cost of your goods) when you shop with your debit card at a supermarket, convenience store (Jackson’s, 7 Eleven, AM-PM, Shell, etc.) or a large discount store like Walmart, Costco or Target. Shops almost never charge a fee for this service, but the bank that issued your card may do so.

Credit and debit cards

Major credit cards such as Visa and MasterCard (and their associated debit cards) are widely used and accepted. Almost all major retailers accept credit cards for transactions of any size, including those of a dollar or two. However, some smaller and independent shops specify a minimum amount (usually between $2 and $5, but may legally charge up to a minimum of $10) for credit card use, as these transactions cost them about $0.30-0.50 (this is also common in bars when opening a bill). Almost all restaurants, hotels and shops accept credit and debit cards; those that do not have a sign saying “CASH ONLY”. Other cards such as American Express and Discover are also accepted, but not as frequently. Many retailers have a window sticker or counter sign with the logos of the four major US credit cards: Visa, MasterCard, AmEx and Discover.

Few high-end shops in major cities have window displays for foreign cards like JCB and China UnionPay. However, both JCB and China UnionPay have an alliance with Discover, so they can be used at all retailers that accept Discover cards.

For larger purchases, it is common for US retailers to ask for photo identification. Shops may also ask for photo identification for cards issued abroad. In certain circumstances, credit/debit cards are the only way to make a transaction. So if you don’t have one, you can buy a prepaid card or a gift card with the Visa, MasterCard or AmEx logo at many shops, but you may need to show ID before the card is activated.

Transaction authorisation is done by signature on a paper receipt or computer pad, although many retailers forgo signatures for small purchases. The US is in the process of implementing the “chip-and-PIN” EMV credit card authorisation system used abroad. However, don’t expect to find many compatible card readers. Many retailers continue to swipe cards, and even where there is a chip card reader, the retailer may block the slot into which the chip is to be inserted. After the switch to chip machines, retailers will in most cases continue to require a signature on a receipt or computer keyboard rather than using a PIN (as chip technology is mandatory).

Gas station dispensers, some vending machines on public transport and other types of vending machines are often equipped with credit/debit card readers. Many gas station dispensers and some ATMs that accept credit cards require the postcode of the card’s billing address in the US, which effectively prevents them from accepting foreign cards (they are unable to recognise a foreign card and switch to PIN authentication). At gas stations, you can use a foreign card by paying the attendant inside. If you live in Canada and use a card with the MasterCard logo, you can use it at any U.S. gas pump that asks for a postcode by entering the digits of your postcode (letters and spaces are ignored) and adding two zeros to the end. When using a debit card, some petrol stations will place a hold on your account for a certain amount (a notice will be posted at the pump, usually $75) and the amount charged will then be updated once you have filled up (however, there is often a delay of 1 to 2 days between the “hold” being lifted and the amount charged being updated).

Gift cards

Any major commercial establishment (e.g. a shop, a restaurant, an online service) with a nationwide, regional, national or online presence offers consumers its own gift card to use at any of its outlets across the country or at its online shop. Despite the word “gift” in gift card, you can actually buy and use these cards for yourself. A gift card for a particular establishment can be purchased at any branch of that establishment. Supermarkets and drugstores also offer a variety of gift cards from different shops, restaurants and other services. If you have bought them or friends have given them to you, you can use the gift card of a particular shop or restaurant at any of its branches in the country or at its online shop for any amount. If the balance on the gift card is not sufficient, you can use other means of payment to cover the balance (e.g. cash, credit card or a second store-specific gift card). The Gift Card also includes instructions on how to check the balance online. Gift Cards are unlikely to work at shops outside the United States, but if you are in the United States, you can still use the Gift Card to make purchases at a merchant’s online shop in the United States.

VISA, Mastercard and American Express gift cards are also sold and can be used in the same way as most other regular debit and credit cards in the US.

Value added tax

There is no general national sales tax (such as VAT or GST), although national taxes are levied on certain products, including fuels (petrol and diesel). Therefore, there is nothing to be refunded by customs officials when leaving the United States.

However, most states impose a retail sales tax of between 3 and 10 per cent (typically 4 to 6 per cent). A few states do not have a state sales tax, but allow municipalities and communities to levy sales taxes. In some places, sales taxes are levied at both the state and local levels, the latter sometimes based on districts established to ensure high revenues (e.g. a special tax in the airport sector). Most states also levy significant taxes on alcohol and cigarettes. Because of this wide variation in rates and what is taxable, taxes are almost never included in the prices shown (exceptions: Fuel, alcohol consumed on site, and food stalls or food trucks). Instead, they are calculated at the time of payment; be prepared for the total amount to be higher than indicated on the price tags! In most states, food and various other “necessities” (such as clothing) are generally exempt from sales tax, but almost all other retail transactions, including restaurant meals, are subject to sales tax.

Many cities also levy sales taxes, and some cities have tax zones near airports and business districts to take advantage of travellers. As a result, sales tax can vary by up to 2% within a few miles. While sales tax can be a nuisance, regional price differences usually have a greater impact on the traveller’s wallet than the savings from finding a destination with low or no sales tax.

Places to shop

America is the birthplace of the modern enclosed mall as well as the open-air mall. In addition, American suburbs have miles of small malls or long rows of small shops with shared parking, usually built along a main thoroughfare. Large cities still have central shopping districts that can be accessed by public transport, but pedestrian-friendly shopping streets are rare and usually small. Most medium-sized suburban cities have at least one shopping centre with one or more large shops, as well as restaurants and retail outlets. There are also one or more strip malls with shopping centres, car dealerships and offices.

The United States pioneered the factory outlet and the factory outlet centre, a shopping centre consisting mainly of factory outlet stores. Factory outlet centres are located along major interstate highways outside most American cities.

US retailers tend to have some of the longest opening hours in the world, with chains like Walmart and 7-Eleven often having shops open 24 hours a day, 7 days a week. Department stores and other large retailers are usually open from 10am to 9pm most days, and possibly from 8am to 11pm during the winter holidays. Discount stores, while not open 24/7, tend to stay open longer than traditional department stores; when they do close, it is usually between 10pm and midnight. Most supermarkets stay open late into the evening, usually until at least 9pm, and a significant number stay open 24 hours a day, 7 days a week. Sunday opening hours tend to be somewhat shorter; a small number of municipalities mandate late openings, early closings or even complete closure on this day (sometimes depending on the type of retailer). The United States does not regulate the timing of sales promotions like other countries. US retailers often announce sales on all major holidays and in between to attract customers or get rid of merchandise.

American retail shops are huge compared to retail shops in other countries and are a shopper’s dream. As such, they usually offer a wide range of items. Department stores typically sell clothing, shoes, furniture, perfume and jewellery. Supermarkets sell fruit and vegetables, meat, fish, paper products, canned goods, milk, cigarettes and (where local and national laws allow) alcoholic beverages (usually beer, in many places also wine and/or spirits). More and more discount stores offer either a grocery section or a complete supermarket, including Walmart (although they were not the first to introduce this concept) and Target. In poor neighbourhoods or along highways, convenience stores often exist alongside petrol stations, offering a small assortment of ready meals, drinks, sundries and cigarettes, at prices that are not competitive with supermarkets.

Unlike many other countries, the USA does not have large markets that are open every day. Instead, there are farmers’ markets in cities and suburbs where producers sell fruits and vegetables directly to consumers. These events usually take place once a week and only from late spring to the summer months on a specific street or car park. Some farmers’ markets operate year-round and take place once or twice a month during the winter months.

If you see a driveway full of items on Friday afternoon, Saturday and/or Sunday, it is probably a garage sale. On weekends, it is not uncommon to see families selling household items they no longer need in their driveway, garage or yard. Estate sales are similar to garage sales, the difference being that they are selling anything left behind by someone who has recently passed away or someone who is moving far away, perhaps overseas, and needs to liquidate everything. Therefore, estate sales usually have more items than garage sales. Other similar sales may take place in a church building or car park, where community members gather unneeded items from their homes in one place to sell together. The money generated from these sales usually goes to the church (e.g. for capital improvements) or to a mission or project it supports. Imagine a person’s trash can be your treasure. Along busy roads, you may see A-frame signs or other billboards attached to utility poles to direct traffic to the location of the yard or estate sale. Bargaining is expected and encouraged.

Flea markets (called “swap meets” in western states) consist of dozens or even hundreds of vendors offering all kinds of goods, usually at low prices. They are sometimes held in convention centres, stadiums, old outdoor cinemas, fairgrounds or large car parks in suburbs. Some flea markets are very specialised and cater to collectors of a certain kind, others simply sell all kinds of items. Here, too, haggling is the order of the day.

Second-hand shops are retail outlets run by charities such as Goodwill Industries, the Salvation Army, St Vincent de Paul and various local churches and charities. They accept unwanted or no longer needed household items as donations and resell them at a profit to fund the general running costs of the shop and the (charitable) projects they are involved in. Other more expensive and valuable items, such as antiques, coins, collectibles, jewellery, newer software and hardware, tools, etc. are separated and sold separately at online auctions on their websites. Other second-hand shops may be computer recyclers who only accept unwanted, obsolete and/or damaged computer equipment for recycling. They tend to test and/or refurbish anything that is not obsolete (between 5 and 10 years old) but is in working order to offer them for sale at a fraction of the price of a new computer bought at a big box store.

The Americans didn’t invent the auction, but they certainly perfected it. The fast, singing cadence of a country auctioneer selling everything from farm animals to collectible furniture is a special experience, even if you have no intention of buying anything. In the big cities, you can see paintings, antiques and works of art sell for millions in minutes at Christie’s or Sotheby’s auction rooms.

Large U.S. retail chains

According to Deloitte, the largest fashion retailer in the United States and worldwide is Macy’s, Inc. with more than 800 mid-priced Macy’s department stores in 45 states, Puerto Rico and Guam, and a smaller number of upscale Bloomingdale’s shops. Nordstrom is another upscale department stores’ that can also be found in most states. Mid-range shops include Kohl’s, Sears, The Gap and JCPenney, while lower-end shops are dominated by Marshalls, TJ Maxx and Old Navy. Large shops tend to be located in suburban areas, often in shopping centres, although a few can be found in inner cities or small rural towns.

General discount shops like Walmart, Target and Kmart are ubiquitous. Many discount stores not only sell clothes and small items, but also have a small grocery section or a complete supermarket; in fact, Walmart is both the largest grocer and the largest chain shop in the country. The three largest supermarket chains are Kroger (which includes Dillon’s, Fry’s, Bakers and Fred Meyer, among others), Safeway (which includes Albertsons and Haggen in the US) and SuperValu, but they operate under older regional names in many states (e.g. Vons and Ralphs in California, Fred Meyer in Oregon and Cub in Minnesota). There are smaller regional supermarkets, such as Wegmans on the East Coast and H-E-B in Texas. A number of American suburbs have upscale markets, such as Whole Foods, that specialise in more expensive items, such as organic produce. The largest warehouse club chain is Costco, whose main competitor is Sam’s Club (operated by Walmart). The three major drugstore chains are CVS, Walgreens and Rite Aid, with the latter two in the process of merging. In addition, almost every discount store and many supermarkets also have a small pharmacy. Most cities and suburbs have several supermarkets or pharmacies, and usually a Walmart or other large retailer.

A special note on pharmacies in discount stores and supermarkets: As a rule, discount stores group many pharmacy items – over-the-counter medicines, dental care products, cosmetics, hair care products, soaps, first aid products, etc. – in one area of the shop near the pharmacy counter. – This is not always the case. This is not always the case in supermarkets, although it is increasingly becoming the model used by discounters (Walmart uses this model in both its discounters and its supermarket-only stores).

In several areas of retailing, ruthless consolidation has led to the survival of a single national chain to compete with a number of smaller regional chains. This is the case with bookstores (Barnes & Noble), electronics shops (Best Buy), convenience stores (7-Eleven) and household goods (Bed Bath & Beyond).

Costs

Unless you live in Australia, Canada, Europe or Japan, the US is generally expensive, but there are ways to limit the damage. Many Europeans come to the US to shop (especially for electronics). Although prices in the US are lower than in many European countries, keep in mind that you will have to pay taxes/duties on goods bought abroad. Also, electronics may not be compatible with standards when returned (electrical, DVD, etc.). So the savings you make by buying in the US can easily be reversed when you return. Also, your item purchased in the USA may not be eligible for warranty service in your home country.

A basic budget for camping, hostels and preparing your food could be $30-50 a day, and you can double that if you stay in motels and eat in cheap cafés. If you then add a rental car and a hotel room, you’re already at $150 a day or more. There are also regional differences: big cities like New York and Los Angeles are expensive, while prices drop in rural areas. Most American cities have suburbs with good hotels, which are often much cheaper than those in the city centre and have a lower crime rate. So if you plan to rent a car and drive between several major cities during a single visit to the US, it is usually best to stay in safe suburban hotels with free parking, as opposed to downtown hotels that charge exorbitant parking fees. Also, if you have generous American friends who give you gift cards for any reason, these cards can help cover some of the costs.

If you plan to visit any of the National Park Service sites, such as the Grand Canyon or Yellowstone National Park, it is worth considering purchasing a National Parks and Federal Recreational Lands Pass. It costs $80 and gives access to almost all federally managed parks and recreational areas for a year. Since admission to many parks costs at least $20 each, the pass is the most economical option if you are visiting more than one park. You can redeem receipts for 14 days of single admissions at the park entrance to upgrade to an annual pass if you find yourself wandering around and end up visiting more parks than planned.

Many hotels and motels offer discounts for members of certain organisations that anyone can join, such as AAA (formerly the American Automobile Association). If you are a member or belong to a club affiliated with the AAA (e.g. the Canadian Automobile Association, the Automobile Association in the UK or the ADAC in Germany), it is worth asking about this when you arrive.

Tipping

Tipping is common in the service industry in the United States. Standards vary, but tips are always given to waiters in restaurants and bars, taxi drivers, parking attendants and bellboys in hotels, and should only be omitted in extreme cases of poor service. The salaries paid in these professions and even their taxes take into account that they receive tips, so it is really inappropriate to leave them out.

In the United States, tipping is so common, and in some cases expected, that in many service establishments, such as hair salons and restaurants, customers who have not tipped are often asked to pay a tip or, less commonly, are berated or insulted by staff for being “ripped off” even though such behaviour is clearly considered inappropriate on the part of the staff.

While Americans themselves often debate the correct amount and who exactly deserves a tip, the generally accepted standard rates are as follows:

  • Hairdressers, other personal services: 10-15%.
  • Bartender: $1 per drink if it’s cheap, or 15-20% of the total price.
  • Grooms: $1-2 per bag ($3-5 minimum regardless)
  • Hotel porter: $1 per bag (if he helps), $1 to call a taxi.
  • Shuttle driver: $2-5 (optional)
  • Private car and limousine drivers: 15-20%.
  • Valet parking: $1 to $3 to retrieve your car (unless parking is already paid for).
  • Housekeeping in hotels: $1-2 per day for long stays or $5 minimum for very short stays (optional).
  • Food delivery (pizza, etc.): $2-$5, 15-20% for larger orders.
  • Bicycle couriers: 3-5
  • Tour guide/activity leader: $5-10 if he or she was particularly funny or informative. Tips vary depending on the size of the group (larger groups have lower tips), the cost of the tour, etc. It is often best to ask other members of the group or the guide himself what is a “good” tip.
  • Taxis: In yellow and chauffeured taxis, a tip of 10-20% is expected. Always tip more for better service (e.g. if the taxi driver helps you carry your luggage or pram). Leave a small tip if the service is poor (e.g. if the taxi driver refuses to turn on the air conditioning on a hot day). For taxis with a driver, if you hail the taxi on the street and negotiate the fare in advance, pay the negotiated amount plus an additional $1-2.
  • Full service restaurants: 15-20%. Many restaurants charge a mandatory service fee for large groups. In this case you do not need to tip extra – check the bill.

It is important to keep in mind that the legal minimum wage for restaurant waiters and other tippers is quite low (only $2.13/hour before tax), and that tips are supposed to bring them up to a “normal” minimum wage. So in restaurants (and in some other professions), tipping is not just a way of saying thank you for the service, but an essential part of the waiter’s salary.

Remember that while you should normally tip for reasonable service, you are never obliged to tip if the service was truly awful. If you receive exceptionally poor or rude service and the manager does not fix the problem when you point it out, a small, deliberate tip (one or two coins) will express your displeasure more clearly than no tip at all (which could be interpreted as a forgotten tip).

If you pay your bill in cash, leave a tip on the table when you leave the restaurant (you don’t have to hand it in personally or wait for it to be collected), or if you pay by credit card, you can write it directly on the deposit slip when you sign it. Look carefully because the slip will usually say if a 15% tip has already been added.

In restaurants where customers stand at a counter to place their order and receive their food (such as fast food chains), tipping is not expected. Some of these restaurants may have a “tip jar” near the cash register that customers can use at their discretion as a thank you for good service. In a cafeteria or buffet, it is normal to tip as the service staff will often clear the table for you and refill your drinks, etc.

The tipping rules for concierges are much more opaque. For most services (requesting maps, information, tours, etc.), no tip is expected. But for things beyond that, such as special, unusual, time-consuming requests, when you get a lot of attention while others wait, or even just for an exceptionally high level of service, the tip should generally be substantial, usually $5 or more (a $1 tip would be insulting). Tipping can also be a good way to get special treatment during your stay: a good anticipatory tip for a restaurant reservation can lead to special preferential treatment at the restaurant, tips can make unusual or difficult requests possible when the concierge would otherwise hesitate, unexpected tips can lead to special service throughout your stay, etc. If you particularly enjoyed a staff member’s service during your stay, you should leave a larger tip ($5 or more) when you leave the hotel.

Most of the jobs not mentioned here are not used to tipping and would probably refuse it. Retail workers or people in highly skilled service positions (such as doctors or dentists) are good examples. Never try to tip a public official, especially a police officer; this could be construed as attempted bribery (a serious criminal offence) and lead to serious legal problems.

Tipping managers and business owners is almost always inappropriate unless you are hosting a large party, wedding or event. Even then, be careful how you present the tip: It’s best to offer the person in charge (usually the main caterer) a percentage of the total bill and subtly thank them for sharing it with their staff.

Tipping can be good for you if you use common sense. While it is usually presented as an expected part of payment, it can also be a subtle (and acceptable) bribe to get preferential treatment. This is especially true for hotel staff and bartenders. Unusually high tips can also be a good strategy to secure preferential treatment in the future if you plan to frequent the same place. A good tip also makes you look good to friends, dates and business partners (and the opposite is true for a bad tip).

Purchase of electronics for export

A popular idea is to buy a new mobile phone in the US to use on your home network. Unfortunately, there are several complications:

  • Many phones are on the wrong frequencies for use outside the continental United States. The 850/1900 MHz frequency is most widely used in the US; several other frequencies are used, including UMTS and high-speed data (3G, 4G, LTE).
  • Verizon, Sprint and some low-cost networks use the CDMA standard, which only a few other countries support. CDMA does not require mobile phones that support removable SIM cards; it is not compatible with the GSM (2G) and UMTS (3G) global standards.
  • US operators sell SIM-locked handsets. Access to another network requires an unlock code, which operators provide to their existing customers for a fee only after an arbitrary minimum period. Third-party unlock codes are legal, but availability varies by model/manufacturer. A handful of electronics stores offer unlocked, usable phones worldwide, but this is a minority.
  • The advertised prices present the devices as cheap or “free”, with the actual cost hidden in the monthly price of the expensive post-paid tariffs. The actual price of buying a device is much higher, if it is offered at all. Operators also tag the devices with logos and apps that cannot be uninstalled or remove software features.

Similar incompatibilities exist with many other common electronic devices. Televisions do not conform to the international DVB standard used in other countries; DVDs and Blu-ray Discs are regionally encoded and use the frame size and frame rate of the US television system; digitally tuned radios use incorrect channel spacing for other ITU regions. Even if the unit works in your home country, there is probably no local warranty coverage.