Here’s an enduring economic fact of life for women: Products marketed to them typically carry higher retail prices than similar items targeted to men. It’s known as the “pink tax,” and now one company is now taking a stand against it.
Boxed.com, an online retailer that sells bulk items, is lowering prices for female-targeted items that are more expensive than those for their male counterparts. It’s also lowering the cost of feminine hygiene products to counter the “luxury” tax that 39 states apply to tampons and pads.
The pink tax is increasingly drawing the attention of advocates and lawmakers, given that women are hit with a double-whammy: They not only pay more than men for basics like deodorant and clothing, but they earn about 80 cents for every $1 men earn. Products marketed to women and girls cost about 7 percent more than otherwise identical products sold to men, the New York Department of Consumer Affairs found in a 2015 report.
On top of that, women pay sales taxes for feminine hygiene products because they’re classified as “luxuries” in many states.
“They aren’t a luxury product, and we thought that was unfair,” said Chieh Huang, the CEO of Boxed. “Other retailers hopefully will follow this. It would be cool to solve a pretty big disparity.”
Since Boxed will still need to collect sales tax on feminine hygiene products, the company is lowering the prices of tampons and pads by about 9 percent to offset the impact of taxes for consumers.
It’s also reducing prices of razors and personal care products that are targeted to women but cost more than male-targeted products on a per-unit or per-ounce basis. For instance, Venus Sensitive Skin Shave Disposable Razors will decline in price by 45 percent, dropping from $31.99 to $17.46.
Huang said the idea was brought to him by Nitasha Mehta, associate director of reengagement marketing, and other women who work at the company. Before that, he said it “hadn’t occurred to me” that this was an issue for women. Mehta said she heard about the issue from watching a commercial with comedian Amy Schumer for Budweiser, in which she mentions that women earn less but pay more for goods and services.
“I wanted to look at the female-specific products and how they relate on a per-product cost for their male equivalents,” Mehta said. “There was a significant difference.”
Razors tended to have the biggest price difference among the products sold on Boxed, she said. But personal care products such as body wash and shampoo can also carry higher prices for women.
So why do companies charge more? It may be that they’re spending more to market to women or on research and development.
Then there’s the cynical theory: price gouging and discrimination. Earlier this year, Congresswoman Jackie Speier, D-California, introduced the Pink Tax Repeal Act, which would prohibit companies for charging different prices for similar products or services because of a customer’s gender. Speier said the pink tax has “cost women incalculable economic damage while fostering misogynistic attitudes.”
Still, Mehta said there isn’t a lot of research about why companies charge women more. She noted that based on her personal experience, more expensive women’s products aren’t necessarily superior to their male-targeted counterparts. She said that’s why she had already switched to men’s razors, which she found to be not only cheaper but better quality.
“I myself didn’t even realize that some of these items are taxed and I’ve been so accustomed to purchasing at a specific price,” she said. When people learn about the issue, “they get very upset.”
What about margins? Boxed will certainly take a hit, Huang said. But because the typical order on Boxed has 10 items, that will help offset the lower margins from the women’s products with price cuts, he noted.
It’s not the first time Huang has made a big gesture about equality. He earned kudos from his employees and observers last year when he announced that he. So far, he says three children of his employees have taken him up on the offer, and he expects to have five or six in the program soon.
It appears to be keeping workers loyal: He says the company, with almost 500 workers, has had only five employees leave voluntarily in its three-year history.
“In these three years,” he said, “the best part is that we now have a platform where we think we can do right.”