Tax season is upon us, but the Pink Tax is not

In the words of Alicia Keys: A Woman’s Worth…cannot be more when assigning the price of “substantially similar” male consumer products since the passing of AB 1287 on Sept. 27, 2022. AB 1287 eliminates the “Pink Tax,” or gender-based price discrimination in goods that have unfairly placed a higher consumer burden on women shoppers who are charged more than men for identical everyday goods. Such has commonly been referred to as the Pink Tax, and specially refers to the practice of marking up goods based on them being marketed toward women or female consumers. The Pink Tax is not an actual tax, but is a real burden on female consumerism because it results in women spending more over their lifetime. AB 1287 now makes it illegal to place this upcharge on products simply because they are marketed to women.

Current State of Gender-Based Pricing

As it stands, current law only prohibits businesses from discriminating against individuals by charging different prices for services based on gender, not goods. This means men and women must be charged at an equal rate for services such as eating out, getting their car fixed (assuming it’s the same car and not a Prius v. an Aston Martin), or getting a massage. Some states even prohibit advertising different prices for an identical service for men and women, such as a $45 dollar haircut for women and a $25 dollar haircut for men. Although we still see pricing like this for services in California, the requirement that goods be of equal pricing is likely more monitorable and thus more likely to be strictly enforced.

Thus, the Bill is a stride forward in gender-based price discrimination, and consumers should see a big adjustment when shopping for personal, family, or household goods.

AB 1287

AB 1287 amends the Civil Code to add section 51.14, which provides, in pertinent part: A person, firm, partnership, company, corporation, or business shall not charge a different price for any two goods that are substantially similar if those goods are priced differently based on the gender of the individuals for whom the goods are marketed and intended.

The new Code section lays out specific requirements for two goods to be considered substantially similar. All of the following characteristics must be met: (i) no substantial differences in the materials used in production, (ii) the intended use is similar, (iii) the functional design and features are similar, (iv) the brand is the same or both brands are owned by the same individual or entity.

A difference in the color of a product may not, however, be construed as a substantial difference.

Considering the requirements, consumers will not be able to enforce this section where the compared male and female-branded goods are made by distinct brands that are already set at different price points, respectively. The more applicable comparison would be, for instance, whether a deodorant by the same brand, in the brand’s standard packaging, released around the same time has a different price based on whether it is the traditionally male-marketed or female-marketed version. This automatically makes me think of the deodorant, Secret, “Strong enough for a man, PH balanced for a woman.”

Shopping the Theory

To test the theory, prior to writing this column, I went on a popular national store’s website and observed the following:

A popular brand’s substantially similar razors for men and women were approximately $13.29 for a 2pk for women and 9.39 for a 4pk for men.

A popular brand’s substantially similar deodorant for men and women were both $6.39 for a twin pack.

Although there are products that appear to still have some discrepancy, there is evidence of more equal pricing available and on the horizon, and AB 1287 may be the reason.

How will we see this play out? Women-marketed pricing dropping down to men’s-marketed pricing? Or men’s pricing up to women’s? This is left to be determined or may be a mixture of both depending on the company/product.

Other Legislative Action Against More Expensive Shopping Days for Women

AB 1287 was not the first Bill introduced in California to address this issue. AB 1287 builds on the Gender Tax Repeal Act of 1995 that prohibited charging women for similar services. The Act was specifically aimed at services such as haircuts, dry cleaning, alterations, car repairs, and other services. Notably, an earlier version of the Gender Tax Repeal Act aimed to address goods as well as services did not pass.

Other states have similarly seen a trend in gender-based pricing and created legislation to address the discriminatory practice. In a 2015, New York City Department of Consumer Affairs study titled, From Cradle to Cane: The Cost of Being a Female Consumer A Study of Gender Pricing in New York City, gender-based price discrimination was examined in a study of over 700 products. The findings comport with the purpose of AB 1287 – female consumers paid approximately 7% more than men for similar products. The number almost doubled when comparing personal care products, which are sold to women at a rate 13% higher than the average rate sold to men at the time the study was conducted. With current inflation, this discrepancy is likely to have increased, at least prior to the enactment of AB 1287.

Exceptions to the Rule

AB 1287 does not prohibit price differences in goods or services based specifically upon any of the following: (1) The amount of time it took to manufacture those goods (2) the difficulty in manufacturing those goods, (3) the cost incurred in manufacturing those goods, (4) the labor used in manufacturing those goods, (5) the materials used in manufacturing those goods, and (6) any other gender-neutral reason for charging a different price for those goods.

Thus, there is some leeway for more uniquely made products, and if companies can establish a gender-neutral reason for a difference in price, they will be able to continue charging women at a higher rate, or even men in some instances.

Who May Enforce?

AB 1287 is not going to make anyone rich, so ironically, watch your spending. AB 1287 authorizes the Attorney General to seek injunctive relief to stop violations upon five days’ notice to the defendant. The penalty for a violation may be up to $10,000 for the initial violation and $1,000 for each subsequent violation. A court may impose additional civil penalties exceeding $100,000 if the defendant violates the law with respect to the same goods for which the maximum civil penalty was previously given. A Court may also direct restitution to the affected consumer.

AB 1287 is surely something to celebrate moving into women’s history month this week.

“We ask justice, we ask equality, we ask that all the civil and political rights that belong to citizens of the United States, be guaranteed to us AND OUR DAUGHTERS FOREVER.”

~ Susan B. Anthony