The so-called “pink tax” remains legal in California for the time being after a bill outlawing differential pricing based on gender was withdrawn by its sponsor, state Sen. Ben Hueso, a Democrat from San Diego, the Los Angeles Times reports.
California's Assembly Judiciary Committe was expected to vote on the legislation Tuesday after the state Senate granted its approval in May. Retailers and manufactures had opposed the measure, with critics arguing that it put undue pressure on retailers to ensure that prices were equal. Opponents' proposed amendments would have stripped the bill of its punitive powers and required consumers to demonstrate conclusive proof of discrimination, according to Richard Holober, executive director of the Consumer Federation of California, which sponsored the bill.
California already has laws on the books outlawing gender discrimination by businesses, including the 1959 Unruh Civil Rights Act, which requires businesses to grant “full and equal accommodations” to everyone regardless of race, sex, religion or national origin, as well as a 1995 law that outlaws the pricing of services based on gender. Hueso’s bill aimed to expand that law to include “goods.”
Women’s products cost 7% more than similar products for men, according to a study released late last year by the New York City Department of Consumer Affairs comparing some 800 products from more than 90 brands, sold at two dozen New York City retailers online and in stores.
The study received a lot of press and was cited by Sen. Hueso as he promoted his bill, but he withdrew it this week in the face of withering criticism by retailers and manufacturers, which said the measure could confuse consumers and invite frivolous lawsuits.
"One of the reasons that we can't legislate in products is because it's about the market and there is a long supply chain and we don't really know who is responsible for it," trade lawyer Michael Cone told CBS News, which conducted its own investigation after the release of New York’s study. Even the government taxes some apparel differently by gender, Cone said.
Still, time may be running out for the pink tax, which is a disparity that many women find especially galling, considering that on average females also make less than males for the same work.
Experts suggest that retailers and manufacturers can sidestep the pink tax by shifting to dynamic pricing based on gender-neutral metrics like conversion or traffic. Retailers like Jet and Amazon use dynamic pricing that affords lower prices to customers who opt for slower shipping or other variables.
Dynamic pricing is increasingly widespread, according to Keith Anderson, vice president of strategy and insight at e-commerce analytics firm Profitero. It's become table stakes for retailers online, and many retailers are using "sophisticated price optimization platforms that consider competitors' prices but also demand elasticity and cross-elasticities between items/categories, remaining stock on-hand, acceptable price gaps versus competitors, and other factors," Anderson told Retail Dive in email.
But dynamic pricing also comes with its own complexities, including decisions about how consistently a retailer should match its own online prices in stores, which can't provide dynamic pricing, Anderson added. Still, it's a viable option for retailers with questions of how to compete, deal with bloated inventories and protect margins, all without frustrating their female customers.