Don't let Pink Tax pinch your pocket; outsmart the gender-based price discrimination with smart shopping habits; compare the prices wisely and pocket the savings
Same haircut, yet different price tags. Ever observed why your daughter's haircut often costs more than son's? Do the scissors charge extra for braids and bows? Nope. It's just a markup born out of gender-based price discrimination! And it's not just haircuts. Pink toys are heftier than other toys, and women's shampoos, conditioners and razors are often expensive than men's variants.
This gender-based price disparity is subtle, yet real. Welcome to the world of pink tax, where being a woman could mean paying extra. But wait, the Pink Tax is not a problem meant for women alone. It can silently erode a significant portion of a family's savings, especially in households where women are not part of the workforce.
What is Pink Tax?
Pink tax is neither a real tax, nor is it a government-imposed fee. It's just a pricing phenomenon wherein women pay more for buying a product exclusively made for them or enjoying a service tailor-made for them. As there is no outright ban on pink tax, firms reap benefits by pocketing extra revenue generated out of selling the items, without contributing to government's coffers.
Pink toys, haircuts, drycleaning, razors, shampoos, body lotions, deodorants, facial care, skincare items, beauty care, clothing, T-shirts, jeans, salon services etc. suffer the tax.
Across the globe
The term "Pink Tax" is believed to have originated in the U.S. in California in 1994. As per a study done in the U.S., personal care products targeting women were 13% costlier than men's. Further, women's accessories and adult clothing were 7% and 8% more expensive.
The study showed that in their entire lives, women pay thousands of dollars more than men for buying similar products. It further said since many women earn less than men on an average, the Pink Tax throws additional burden on them, economically. Another study in the U.S. said the price for dry cleaning women's shirts were 90% more expensive than those of men's.
In the U.K, an analysis showed women's deodorant was at least 8.9% more expensive than men's variant and women's facial moisturiser was 34.28% more expensive.
In 2017, the United Nations urged its member states to put an end to this gender-based price discrimination and to help women gain equal access to economic participation.
Pink Tax in India
The problem of Pink Tax is yet to bother most Indian families. As per International Finance Students Association's (IFSA) research 'The Gender Tax: Assessing the Economic Toll on Women,' almost 67% of Indian individuals have never heard of the Pink Tax.
In July 2018, the Union Government exempted sanitary napkins and tampons from the Goods and Services Tax (GST). Prior to this rule, these hygiene items were levied 12% GST. Probably, this was the time when Indian women took notice of this gender-based disparity in pricing.
How to avoid Pink Tax?
With a little awareness, you can outsmart the Pink Tax. Choose gender-neutral products or men's variants whenever possible. Compare the quality and if the men's variant is better, skip the pink packaging or choose unisex products.
Instead of comparing prices of the entire package, check the price per unit. For example, compare cost per ml or gram before buying. This can lead to huge savings over time. Often, salons charge more for girls/women even for "basic" short haircuts. Bargain to save a considerable amount. Ask for gender-neutral pricing or visit unisex salons that offer fair and transparent pricing. Compare the cost of men's and women's variants in e-commerce websites before rushing to buy.
Do some research. There are some Indian start-ups that market themselves as gender-neutral and pocket-friendly brands. Further, there are several consumer advocacy groups that campaign for the cause; supporting them could encourage a shift toward fair pricing.
NCDRC ruling
While there are no specific laws in India to address the issue of Pink Tax, the National Consumer Disputes Redressal Commission ruled that companies must follow fair pricing policies and avoid gender-based price discrimination.
The Pink Tax exists because you pay quietly. If people started comparing prices and switched smartly, markets might ensure fair pricing. Avoiding the pink tax is not just about saving money, it's also about claiming equality in the marketplace.
(The writer is an NISM & CRISIL-certified Wealth Manager and certified in NISM's Research Analyst module)