Sales Tax Error?

Discussion in 'Customer Service' started by SemperVaporo, Mar 12, 2020.

  1. SemperVaporo
    SemperVaporo Well-Known Member
    I just purchased 4 items totaling $33.34 for the items, The sum of the Processing fees for the items was $1.68 making the total $36.02.

    Item 1: $7.50 * 0.05 = $0.375 rounds to $0.38
    Item 2: $8.82 * 0.05 = $0.441 rounds to $0.44
    Item 3: $7.50 * 0.05 = $0.375 rounds to $0.38
    Item 4: $9.52 * 0.05 = $0.476 rounds to $0.48
    Sums $33.34 * 0.05 = $1.667 rounds to $1.67 but the sum of the individual processing fees is $1.68, which matches the invoice.
    (So they are not calculating the processing fee based on the total cost of the items, but the total of the processing fees for each individual item after rounding.)

    Item total plus Processing fees total = $33.34 + $1.68 = $35.02

    Plus $6.99 shipping brings the total to $42.01

    The above matches the invoice.

    Where I live there is a 6% state sales tax and a Local Option Sales Tax of 1%, so a total of 7% tax.

    $42.01 times 7% = $2.9407, but the invoice shows $2.96. Even if they did a 'round up' to the next cent, instead of a 5/4 round, the invoice would still be off by a penny.
    I calculate:
    Me Invoice
    Sub Total: $42.01 $42.01
    Sales Tax: $2.94 $2,96
    ----------------------------------------
    $42.95 $42.97

    Now I don't begrudge the state or city that infernal LOST (what an acronym!) the extra 2 cents, nor do I begrudge Shapeways the 2 cents, but whose calculator is broke?
     
  2. Lefteri
    Lefteri Shapeways Employee CS Team
    Hello @SemperVaporo thank you for reaching out about this. For issues as specific as this it is best to contact us via service@shapeways.com and provide the order number. I will reach out via our helpdesk right now and we can proceed from there.
     
  3. SemperVaporo
    SemperVaporo Well-Known Member
    For them what care: The "problem" was that I was not rounding all calculations to 2 decimal places (whole cents) after each multiply. Such as the 5% Processing Fee, the sales tax (7% in my case) on each individual item AND each individual Processing Fee AND the shipping costs. Those rounding actions can either increase the effective cost or decrease it when you sum the values.

    If they all round down, such as if they had values of 5.49 cents, then the sum of 5 of those values prior to rounding would come to 27.45 which would round to 27, but if your round them before summing, the sum is 25, a difference of 2 cents.

    Conversely, if they all had values of 5.51, those would sum before rounding to 27.55 which would round to 28, but if you round the values before the summation, the sum would be 30, a 2 cent difference the other way..

    Even if you have only one item there is rounding occurring four times; the Processing Fee (5% of the cost of the item), and the Sales Tax on the product, the Processing Fee and Shipping. Sometimes some will round up and others will round down and they will sort of cancel each other out and sometimes they will gang up in one direction or another and create an apparent error or difference if you do the calculation off-line without doing the rounding after every multiplication.

    I have an Excel spreadsheet where I plug in the cost of printing an item and it spits out the total cost for me long before I put anything in my shopping cart or proceed to checkout.

    It won't take much to correct my spreadsheet to work the same way that Shapeways does it. So I am satisfied with the situation.
     
  4. jimmyadvice
    jimmyadvice Shapeways Employee CS Team