Ever since the Canadian loonie eclipsed the U.S. dollar in value, shoppers from the north have been flocking to stores near the U.S. side of the border. But at several malls, shoppers are leaving more than their loonies behind. Canadian customers are dumping their old clothes in dressing rooms or garbage cans, and then wearing their new purchases across the border to avoid paying duty fees. "If you pull into the parking lot Monday morning, you see bags of shoes and jeans," says Russell Fulton, director of marketing at the Walden Galleria Mall in Buffalo, N.Y.
Canadian duty fees on U.S. purchases range upwards from 6 percent, depending on where you cross the border, and evading payment is illegal. But Canadian shoppers seem OK with risking time in the slammer to save money. "We see the clothes left in the dressing room and we're not going to speculate about anything illegal, but it doesn't take a rocket scientist to figure out what's going on," says James Schlesinger, CEO of Talisman Cos., which owns the Fashion Outlets of Niagara Falls. To make the best of the situation, Schlesinger's mall now has charity bins outside the stores to collect the excess clothing. An average of 20 full containers are picked up by the Salvation Army and a local community mission each week. It gives a whole new meaning to tax-free donations.