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The pink tax: What it is and how you can battle it

Summary

Women’s and girls’ products cost an average of 7 percent more than similar products for men and boys. This phenomenon – known as the pink tax – affects women’s everyday lives, whether we realize it or not.  With unique bonus categories that allow cardholders to earn extra points or cash back, certain rewards and cash back cards can make it easier for women to offset the pink tax.

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In a recent study across different kinds of purchases, the New York City Department of Consumer Affairs found that women’s and girls’ products cost an average of 7 percent more than similar products for men and boys. This phenomenon – known as the pink tax – affects women’s everyday lives, whether we realize it or not.  

How much more do women spend than men?

  • 7 percent more for toys and accessories  
  • 4 percent more for children’s clothing and 8 percent more for adult clothing  
  • 13 percent more for personal care products and 8 percent more for senior/home health care products

Coupled with the gender pay gap and other comparable inequalities like the tampon tax, it’s an inequitable reality in consumer spending. Though it’s impossible to control the entire consumer market, there are still a few ways you can combat these financial realities, and you can do so with your wallet. Here’s our guide on how to financially conquer the pink tax using strategies that could ultimately save you a lot of money.

How does the gender pay gap tie in?

In 2019, women currently earn 79 cents for every dollar compared to men, according to Payscale’s 2019 State of the Gender Pay Gap.

Once experience, industry and job level are evened out, the median salary for men is still roughly 21 percent higher than the median salary for women. A woman who does exactly the same job as a man with the exact same qualifications is still paid two percent less, according to Payscale’s report. Unfortunately, this controlled wage gap has only improved $0.008 since 2015.

In addition, most black women make 63 percent of what white, non-Hispanic men make, according to the American Association of University Women (AAUW).

Therefore, women are affected even more by the pink tax — because they earn less. Unfortunately, the pink tax affects every single woman (and girl) in the United States. Not only a financial issue, it’s an equality issue as well. In addition to making less, women are less represented in all sectors. For example, only 24 women led Fortune 500 companies in 2018.  

Most prevalent categories

Several specific categories of the most expensive products include personal care products, female adult clothing, female children’s toys and senior/home health care products. With unique bonus categories that allow cardholders to earn extra points or cash back, certain rewards and cash back cards make it easier for women to offset the pink tax in these categories.

Personal care products

The United States Government Accountability Office (GAO) completed a study in August 2018 which analyzed 10 personal care product categories and found that the average retail prices paid were significantly higher for women’s products than for men’s equivalents in five categories. In two of the chosen categories — shaving gel and non-disposable razors — men’s products in those areas sold at a significantly higher price. Razor blades had mixed results and disposable razors and mass-market perfumes showed no significant gender price differences.

How much more women’s personal care products cost than men’s (according to NCDPA):


What is the tampon tax?

Among those personal care products, tampons are one product for which, of course, there is no male equivalent product, though Actor Ashley Judd tried to create a parallel at the 2017 Women’s March in Washington, D.C. by saying, “Pads and tampons (are) still taxed when Viagra and Rogaine are not.”

The company Boxed defined the tampon tax as a 4-10 percent tax on feminine hygiene products. While tampons aren’t taxed exclusively any more than lotion, shampoo or hair gel are, there are some states that have moved away from taxing female personal hygiene products.

Currently, eight states ban tampons, menstrual cups and pads from taxation: Minnesota, Illinois, Connecticut, Pennsylvania, New York, Maryland, New Jersey and Massachusetts. Five states don’t have sales tax at all, so 37 states continue to tax feminine hygiene products.

How credit card rewards can offset these upcharges:

Several credit cards offer rewards on drug store purchases, which can help make up for a bit of this extra cost. The Bank of America® Cash Rewards credit card allows users to choose drug stores as their 3 percent bonus category, if that is better for your needs than online shopping. (Note: You can change your 3 percent category once per calendar month to accommodate changes in spending, but earning is capped on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter.)

Another good option is the Chase Freedom®, which offers 5 percent cash back in select rotating categories that you activate each quarter ($1,500 purchase cap on rotating category).

Adult clothing

DCA also price-compared men’s and women’s dress pants, dress shirts, sweaters, jeans, shirts, socks and underwear. They compared 292 individual articles of clothing and 40 items for each type of garment. DCA found that women’s clothing cost nearly 8 percent more than men’s.

On average, women’s shirts cost nearly 15 percent more, with an average difference of $3.72 per shirt. Specifically, dress shirts cost women nearly 13 percent more, with an average difference of $6.65 per shirt. The only item that cost men more, according to the analysis, was underwear (nearly 29 percent more on average).

How much more women pay for an article of clothing than men (according to NCDPA):


How credit card rewards can offset these upcharges:

A credit card with bonus rewards on department store purchases can take a bit of the sting out of a higher clothing bill. A great card for families and frequent shoppers, the Blue Cash Everyday® Card from American Express offers a generous amount of cash back on everyday purchases including 3 percent cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1 percent).

Children’s toys

Children’s toys are another category where the pink tax is prevalent. DCA compared bikes and scooters, general toys, backpacks, preschool toys, helmets and pads as well as arts and crafts. On average, children’s toys and accessories cost 7 percent more for girls. Helmets and pads were the most expensive category, at 13 percent, with an average difference of $2.90 per product. The most evenly-priced category was backpacks, but girls’ backpacks were still more expensive, at 0.8 percent more on average, or $0.20.

Average of how much more girls toys cost than boys (according to NCDPA):

How credit card rewards can offset these upcharges:

Girls’ toys might cost a bit more than similar products for boys, but choosing the right rewards cards can help make up for some of this. Consider a card with an online shopping bonus, which can earn you extra cash back for ordering toys from any online retailer.  

Senior/home health care products

As women age, the costs don’t come down. In fact, women still pay more than men. Items such as supports and braces, canes, compression socks, adult incontinence products, personal urinals and digestive health products are more expensive. Women pay 8 percent more with these types of products, according to DCA.

How much more women’s senior health products cost than men’s (according to NCDPA):

How credit card rewards can offset these upcharges:

Consider cash back credit cards that offer rewards on drug store purchases. Also, if you tend to buy these items online, look for cards that offer cash back on an online shopping category.

Other ways to financially fight the pink tax

It’s possible to combat the pink tax by using the methods below (or you can even try double-dipping some of these methods for an added boost of cost savings).

Buy in bulk

Buying the right things in bulk can save you a lot of money, particularly on a cost per unit basis. For example, if you buy tampons in bulk, you can save a lot of money over the course of time. Keep in mind that buying some items in bulk can actually cost you money, particularly if you’re choosing a product you haven’t tested out prior to purchase.

By and large, it’s important to consider whether buying in bulk makes sense for your budget, particularly when the upfront cost of giant quantities of tampons all at once is larger than the cost of a regular box of tampons, for example.

Buy more gender-neutral things

Particularly when it comes to newborns, stick to as many green and yellow onesies and outfits as you can. After all, the average middle-income family spends between $12,350 and $13,900 annually to raise a child, according to the USDA, and will spend $233,610 to raise a child to adulthood. In addition, gender-neutral items will not only combat the pink tax but also help you save if you have another child down the road.

Support companies that take a stand

Some individuals have called out brands on social media and have even shamed them online for their higher-than-necessary prices for women’s products. Others have taken the approach of boycotting companies that charge higher prices for female products.

Companies themselves have taken action against the pink tax. For example, Boxed has denoted on its feminine products that they’re “pink tax-free” and “prices are equal for all genders.” The company also indicates on its website how much you’d save by purchasing from Boxed compared to spending at retail stores.

Billie, a company lauded as one of the “Top 11 Innovations that Made Women’s Lives Better in 2017” by Fast Company magazine, sells women’s razors. Billie’s website claims it’s “against the pink tax” and even offers a unique pink tax rebate: You can share a referral link with friends, and when they enter their email to join the pink tax rebate, you can get a coupon to spend on your next Billie purchase.

Support women-owned products

As of January 2017, there were an estimated 11.6 million women-owned businesses in the U.S. that employed nearly 9 million people and generated $1.7 trillion in revenues, according to American Express’s 2017 State of Women-Owned Businesses Report.

It’s easy to find women-owned products (which most often reject the pink tax, for good reason)  — just look for the Women Owned logo. Women Owned, which also provides a directory of all women-owned enterprises, is an initiative from the Women’s Business Enterprise National Council (WBENC) and WEConnect International. It was originally created to increase support for women-owned businesses. Women Owned supports female entrepreneurs by raising awareness for Women Owned products.

 

 

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Published: June 24, 2019

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