A similar product, two prices – just because one is pink and the other is blue. This is just one example of the so-called pink tax.
The products often only differ in design and packaging size – one is designed for a female target group, the other for a male – but women still have to dig deeper into their pockets. This price differentiation based on gender is called “gender pricing” or “pink tax”. Translated, this roughly translates to “gender-specific pricing” or “pink tax”. However, this is not a tax, but rather a surcharge that companies add to products marketed to women.
Women are more willing to pay
“Pink tax means that essentially the same products are sold at different prices in different presentations for women and men,” says Armin Valet, head of the nutrition and food department at the Hamburg Consumer Center.
“Companies assume that women are more willing to pay for certain products or services than men,” says marketing expert Martin Fassnacht from the WHU business school. According to him, companies set different prices, especially for cosmetics, services such as hairdressing and clothing, in order to make more profits.
This willingness to pay more is sometimes shamelessly exploited, says Valet. “In some cases there is discrimination in the sense that the presentation and marketing tempt women to buy more expensive products, even though these hardly differ from the men’s version.”
Women often pay more here
Accordingly, products from the cosmetic sector such as creams, shaving utensils, beauty products and perfume are most often affected by the “pink tax”, but also services such as visits to the hairdresser or dry cleaning. For example, women would be disadvantaged when it comes to having short haircuts at the hairdresser or having blouses cleaned (compared to shirts).
The Hamburg Consumer Center has been carrying out market checks on gender pricing since 2015. The most recent sample from February 2023 “gave some cause for hope,” wrote the consumer advice center. Accordingly, for the first time since the study began, disposable razors cost as much in the version for women as in the version for men. Shaving foam, on the other hand, remained more expensive in many cases and price differences were also still observed for perfumes.
A small current sample from the consumer advice center confirms the findings from the previous year. Accordingly, the price differences for perfume and shaving foam can still be up to 50 percent. “We see a problem with regard to individual product groups, especially because this cannot be justified at all by different production costs,” says Valet.
In a study for the Federal Anti-Discrimination Agency in 2017, more than 1,600 similar products for women and men were compared; in 2.3 percent of cases, women paid more and men paid more in 1.4 percent. However, there is currently a lack of current, large-scale evaluations, making it difficult to keep an overview of the status and developments surrounding the “Pink Tax” and “Gender Pricing”.
The tricks of the manufacturers
The tricky thing is that the different pricing is often not obvious at first glance. Products for women and men are often found in different places in drugstores, for example, or the prices of the products are disguised by different designs and quantities. However, it is legally difficult to take action against price discrimination, says Valet – “because they are not exactly the same products, but one is blue and the other is red.”
The consumer protection expert recommends comparing prices. Actually, the responsibility should not rest on the shoulders of consumers. “Our appeal to retailers has always been to refrain from this gender marketing.”
According to consumer advice centers, manufacturers in the past cited, among other things, different ingredients or packaging sizes as well as design as reasons for the different pricing of some products and rejected the accusation of “gender pricing”.
Women in Germany earn less than men
Even if the price differences are usually only a seemingly harmless amount of cents, “gender pricing” contributes to the financial disadvantage of women and creates additional burdens. And this despite the fact that women in Germany, for example, still earn less than men. The adjusted gender pay gap, i.e. the income gap between women and men for the same work, was still 6 percent in 2023.
The unadjusted gender pay gap was 18 percent. However, a large part of the earnings gap is due to the fact that women more often work in industries and professions that pay less. In addition, according to the Ministry of Family Affairs, women in Germany currently spend 43.8 percent more time every day on unpaid care work such as childcare, care or household work – time that is missing for paid work.
Will “gender pricing” become less?
The evaluations by the consumer advice center suggest a decline in gender pricing. “I have the impression that it will be significantly less,” says Alisa Frey from the Düsseldorf Institute for Competition Economics. “My guess is that attention regulates it.” Accordingly, increased public awareness of the issue could put manufacturers and retailers under pressure.
Marketing expert Fassnacht has a different opinion. “Companies these days tend to have to fight harder for customers in the sales markets,” he says. Manufacturers and retailers continued to assume that women were more willing to pay for cosmetics, services and clothing. “That’s why I assume that women will always tend to have to pay a little more than men.” Companies that advertise gender-neutral products, for example, are more of an exception.
Source: Stern
