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How this company saved women millions by eliminating the “pink tax”

Boxed eliminated the common practice of charging women more for the same products. Will anyone else follow suit?

How this company saved women millions by eliminating the “pink tax”
[Image: Boxed]

Perhaps you’ve heard of the pink tax: Women typically pay far more for generally identical products made by the same manufacturers. The only difference is which gender the products targets. This happens on more than 40% of all goods sold, like deodorant and razors. It’s estimated to cost women about $1,350 more than men a year. Plus, there’s another indignity: In 35 states, women still have to pay sales tax on feminine hygiene products like tampons and pads. Despite being necessity products (which go untaxed), they’re categorized as luxury products.

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[Screenshot: Boxed]
In 2016, Boxed, an online wholesaler, decided to try something different. It identified a particularly nefarious category of discrimination–personal care products, where the difference in price between men’s and women’s offerings typically averages 13%–and reduced prices for gender parity. In brand-specific comparisons, disposable razors were the worst offender, charging women about twice as much. Boxed also adjusted against inflation for the “tampon tax” on period products.

[Image: Boxed]
Customers who shop with Boxed can now purchase everything from razors, soap, deodorant, and shaving gels at a bulk and gender-neutral price. “We looked at the products on our own platform and saw pretty significant cost variances for those pink tax items, and decided to discount them so that they were equal on a per unit or per ounce basis,” says Nitasha Mehta, Boxed’s director of marketing. As for period products: “We obviously cannot remove the sales tax, but we can offset it with lower prices. So we discounted them an average of 9% nationally.”

Boxed’s Rethink Pink Campaign dropped the price on 20 items. In March 2019, nearly three years after launching, it reached a total of $1 million in offset discounts redistributed among customers. Along the way, Mehta has become something of an expert on the issue. Earlier this week, she shared the company’s experience during the introduction of a federal bill to eliminate the unequal pricing among manufacturers making similar products that are then resold with gender-based marketing. The legislation is called the Pink Tax Repeal Act,  and it earned co-sponsorship from 28 representatives.

35 states (in green) charge a “tampon tax.” [Image: Boxed]
Whether that act gains traction remains to be seen. Mehta has also testified in several state congressional hearings to repeal the tampon tax, including in Ohio, Colorado, and Nevada, the latter of which recently repealed the tax last year. As a whole, Mehta points out that the U.S. is still well behind other countries on this issue. Canada repealed its tax in 2015, and India and Australia did the same n 2018. “The tampon tax is not a manufacturer-led issue. It’s unfortunately a state-by-state issue, so it’s going to take some time,” she says.

Perhaps the most unexpected thing for Boxed is that no one else has matched its sales tactics. According to the company, its social mission has helped customer loyalty. Women aren’t just half the population, they’re the demographic that is most often in charge of household shopping. In this case, though, Boxed would have appreciated some competition. “One of our main goals in launching this initiative was to get other retailers on board and really create that conversation and increase exposure for this issue,” Mehta says. “Almost exactly three years later, we are still the only national retailer that has taken a stand on this issue.”

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About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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