The Pink Tax: Why Women Pay More

One of the basic principles of successful promotion is the division of the consumer market into categories based on different characteristics. We have talked many times about the different ways of segmenting the audience, and gender division is one of the pillars here. Everything from chocolates and soaps to notepads and cars is divided. It is widely believed that the manufacturer takes into account the individual needs of men and women. Businesses explain the difference in price by the difference in requirements and higher production costs. But while in the case of sewing an evening gown for women, this is understandable (it takes more material and working time to finish a piece), the markup on cosmetics with a “male” perfume or a pink scooter looks absurd. Such a concept in marketing is called the pink tax. Let’s look into how the gender price differential works and how much of a win-win strategy it is for marketers.

What is the pink tax?

It is a form of price discrimination when products labeled, especially for “women” cost more than similar products for men. This marketing technique works on the principle of coloring goods in a certain gender shade. 

Initially, neutral goods, which are not related in any way to the gender of the user, are usually divided into several groups: “for women”, “for men” and universal. This can be anything: shampoo, razors, socks, cigarettes, etc. For women — most often pink, with flowers and glitter. For men — blue, gray, or black with laconic design. More often than not, color and/or smell are the only differences in the quality of goods and do not affect their functionality in any way.

Historical background

The way prices are affected by gender stereotypes was first illustrated by a research bureau in California. In the early 1990s, it was estimated that women’s haircuts tended to be more expensive than men’s and that dry cleaners charged an average of $2 more for washing women’s shirts. The difference of a couple of dollars only seems insignificant. Over a year, the calculations showed, women spent $1,351 more than men on the same set of goods and services. This price difference was later called the pink tax. Although technically it is a markup, not a tax.

Not much has changed since the 1990s. A recent study by the American publication The Balance found that body products cost women, on average, 13% more than men. These include razors, shampoos, shower gels, and more. Although there is progress on the issue of the pink tax. For example, a few years ago women’s Levi’s 501 jeans were 23% more expensive than men’s jeans in the U.S., but now they are the same price.

Features of the gender shopping cart

In addition to the relatively higher price of women’s products, we need to take into account the difference in the volume of the cart of goods of different genders. The problem is not only the price difference but also the fact that women have to buy many more items of clothing, including bras, tights, leggings, skirts, dresses, etc. 

The difference in spending is evident as early as childhood. In 2022, the Rosstat statics agency conducted a study estimating a first-grader kit for school. Such a kit for a girl cost parents on average $55 more than for a boy. The reason is simple: girls need more closet items and individually they most often cost more than for boys.

The pink tax in affiliate marketing

In short, if you drive traffic to GEOs that do not have a legal ban on the pink tax, then you are not limited in any way to increase the prices of women’s products. However, recent studies show that many states are now paying more attention to price discrimination based on gender, with no real justification.

For example, in 2018, the U.S. introduced a bill to repeal the pink tax to end gender discrimination. Some stores, drugstores, and eateries held rallies in support of it.

In 2015, after women’s protests, France reduced the tax on pads and tampons from 20% to 5%, equating them with basic necessities such as drinking water and toilet paper.

In the same year, Canadian authorities also eliminated the tax on feminine hygiene products. And in 2018, they eliminated the 5-10% VAT on pads and tampons in Malaysia.

In February 2020, the Scottish Parliament approved a bill to provide women with free personal hygiene products. Incidentally, in 2018, Scotland became the first country in the world to start handing out pads and tampons for free in schools and universities.

The pink tax in different verticals

Different prices for men’s and women’s products can be found in a wide variety of product categories. Here is a list of the most obvious examples:

1. Nutra — cosmetics, beauty treatments and supplements, sporting goods, personal care items, medicines (painkillers for menstruation are more expensive than usual ones, although they do not differ in components)
2. E-commerce:
   • Clothing — the biggest difference in prices is shown by the categories of blouses and shirts, shoes, hats, and T-shirts.
   • Children’s goods — in many stores toys with female cartoon characters are more expensive than boy characters of the same cartoon.
3. Cars — the price premium for the red body color, which is considered feminine, can be up to 20% in the used car segment. 

How not to be fooled by the pink tax?

It’s important to distinguish between overpricing on objective grounds and artificially inflated prices. For example, a moisturizer with really great functionality (anti-inflammatory, SPF, etc.) can cost more than its male counterpart. Otherwise, female buyers really need to be vigilant. Gradually, this will help change the market. Here’s what you can do:

• Compare the cost of “women’s” items and similar “men’s” items. Feel free to go into the men’s department.
• Study the labels. Figure out if the “for her” label really makes the product more suitable for women, or if it’s just a different package color.
• Rethink your purchases. Companies try to sell as many products and services as possible by appealing to the myth of how women should look and act. Many of these products are unnecessary or downright meaningless. You can still find an array of cellulite creams in stores. A normal manifestation of female physiology is equated by marketers with a flaw in appearance or even a disease. Women have the right to refuse such spending.

Final thoughts

Despite the fact that statistically, women earn less than men and have a need for more necessities, many manufacturers continue to overprice products with the “for women” label. Some examples of gender-based price discrimination are justified by the difficulty of making products for ladies, the increased functionality, or the increased amount of resources used. However, in most cases, the pink tax is simply an example of a marketing strategy to cash in on the inflated beauty standards of modern society. When using such a pricing policy, don’t forget the legal pitfalls — many countries are actively drafting bills to eliminate the gendered price divide.