It’s hard to escape sticker shock. We see inflated prices on everyday products from bottled water to movie popcorn to designer jeans…and the list goes on. Check out these 5 extraordinary markups.
A perfume by any other name would smell as sweet – and it should cost the same. But as long as it’s named after a celebrity, expect to pay 50 percent to 60 percent more than what it costs to make a regular bottle of fragrance.
“When it comes to selling perfume you’re not just selling a product, you’re selling the image that goes along with that product,” says Tod Marks of Consumer Reports who’s studied numerous retail markups. His research shows that companies place a mighty premium on celebrity-branded scents, and they often get away with it. “Few products carry a markup as much as those endorsed by celebrities. After all, they get paid a lot of money. And when you talk about glamour products like perfume the markups can really be into the stratosphere.
He suggests shopping online – versus at the department store – to find the most savings on celebrity-branded perfume, if you must.
Minibar markups get us every time. A chocolate candy bar can have as much as a 400 percent markup. “When guests go to a hotel, whether they’re there on business, pleasure or vacation with family, they’re not thinking about saving any money. In that mini bar, you can reach in and grab a candy bar and pay $5. That’s ridiculous,” says Marks. “And to add insult to injury, what a lot of hotels are doing now is charging a minibar ‘restocking fee,’ where they actually charge you, the customer, to have someone, a hotel employee, go back to your room and put a new bag of chips to replace the one you’ve just taken out.”
Some minibars also have a motion sensor, so if you moved the item around you might actually get billed, whether you’ve eaten it or not.
They’re pretty inexpensive to produce, but carry hefty markups starting at around 200 percent. Instead, consider sending a free, yet elegant, e-card from sites like PaperlessPost.
Convenience also carries a higher price. Take pre-cut vegetables. They may save you a little time and energy, but will cost you double what you’d pay by simply buying veggies whole and taking them to the cutting board yourself.
Brand Name Pharmaceuticals
We’ve preached the value of taking generic drugs versus name-brand over-the-counter medicine on Financially Fit in the past, and the math speaks for itself. The markups are as high as 3,000 percent.
“Consumers are overpaying by leaps and bounds when it comes to buying brand name drugs for which there is no generic counterpart,” says Marks. “In most cases generic drugs can be available for as little as $4 a month, but if no generic is available then you could spend an absolute fortune and go deep into your pockets.”
The U.S. Government Accountability Office did a study that showed consumers saved over $1 trillion over a 10-year period by buying generics versus name brand drugs.
What are some crazy markups you’ve recently discovered? Connect with me on Twitter @Farnoosh and use the hashtag #FinFit