This secret tax could be costing you an extra $1,351 a year
Next time you go shopping, look closely at your receipts. You might notice a pattern … one that is costing you extra money and you don’t even know its happening. You see, costs for certain items such as personal care products, dry cleaning, clothes and vehicle maintenance are just a few examples of the hidden market phenomenon known as the “Pink Tax.”
What’s the pink tax? It’s the higher price YOU pay for the same types of products used by both men and women. Studies show that the average woman may be paying close to $1,400 more a year in extra costs based on the prices of typical household items.
It happens a lot with toiletry items. Investigative reporters from KGW News in Portland did some shopping around at stores such as Target, Walgreens and a few others and found drastic price differences in the same products marketed to both men and women.
For example, a Degree twin-pack for women costs $7.39. The same Degree twin-pack with the same ingredients and the same size in the men’s version is only $3.99. This means women are paying $3.40 for the same product (or 85% more).
It happens with clothing too. Last year, Old Navy was “outed” for charging more for women’s plus-sized clothing but not doing the same for men’s larger size clothing. The plus-sized women’s jeans were $12-15 more than the standard sized ones. However, there was no such difference in the price of men’s plus vs. regular sized jeans.
Gap, which owns Old Navy released a statement explaining the jeans were made by a team of experts who design the most flattering and on-trend plus styles, which includes curve-enhancing and curve-flattering elements such as four-way stretch materials and contoured waistbands, which most men’s garments do not include.
This wouldn’t explain the price disparity in Old Navy’s pricing of plus-sized clothing for different genders. A white, button-down shirt in regular men’s sizes cost the same as it does in Big Men’s sizes while the same white, button-down shirt for plus sized women, is literally double the price as the exact same shirt but in a size smaller.
Shoppers were so outraged over the gender price gauging that over 16,000 people signed a petition against the store’s pricing policy, hoping for change.
Old Stereotypes Remain
Most people … most women, don’t even know the pink tax exits. Only a few states including California, New York City and Florida’s Miami-Dade outlaw gender pricing in. Everywhere else in the country, it’s perfectly legal to charge women higher prices.
“I think it’s ridiculous,” says L. Dorie of Portland Oregon. “I wouldn’t have known. I normally just walk into the store and buy something.”
She’s not alone. Many female shoppers have the same reaction. Tara Collins hadn’t noticed either. She says she hasn’t paid attention to prices to this degree. That’s exactly what manufacturers are banking on.
It’s been happening for a while. In 2010, Consumer Reports found that drugstores set higher prices for products directed at women. In 2011, researchers at the University of Central Florida found that women paid more for deodorants, razors and body spray sold at national retailers.
Consumer Reports followed up with manufacturers to find out why they charged more. Most responded saying women’s products cost more to make, use different formulas or that the stores themselves raise the prices in exchange for a coveted eye-level spot on their shelves.
It’s not just household items where this happens. Women pay more for certain health services too. According to researchers at Mercer L.L.C., women pay more for health benefits and receive less coverage. In their study, they found the female workforce pays on average 13% more for single coverage than their male counterparts pay and typically are subject to deductibles that are 31% higher.
Even a 12-year old thought it was wrong
Progress is slow but coming. For instance, under the Affordable Care Act, insurance companies can no longer charge women more for identical services.
So what can you do to avoid being a victim of the pink tax? One way is to buy the men’s version of certain products when you can. Does the color of disposable razors really matter?
The other thing to do is shop around for the best prices on things like dry cleaning and vehicle maintenance. Never be afraid to call out companies who do practice gender biased pricing. Ask them why they charge women more for the exact same product or service used by men.
You might also consider blasting them on Twitter or other social media.
Think taking action or questioning a companies’ pricing tactics doesn’t matter. Then you should meet 12-year old Madeline Messer. She’s an avid gamer and noticed that some game developers were charging high prices for female characters. One of the games she enjoys offers a male character at no cost. If you want the female version, you’d have to pony up more money, even though most of the people playing the game are female.
Madeline wanted to know if this refined to the game she plays or across most gaming platforms. What she found is that out of the 92% of games that had gender-identifiable playable characters, 90% of had free male characters compared to only 15% offering free female characters. When she averaged the price for a female playable character in the games where women weren’t free, she found it cost on average $7.53.
She published her findings in an editorial in The Washington Post. One line that drew a lot of attention was this one: “It’s not fair … I’m being forced to play as a boy, why?”
The bottom line is these types of pricing discrepancies matter. Remember, our goal is to become financially secure. Making sure, we are spending our hard-earned money wisely makes a difference. In this instance, the difference we’re talking about is as much as $1,300 in unnecessary costs.
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