I did a segment on the Today Show on Friday looking at six of the most overpriced items we buy frequently. (You can check out the clip here.) Below I've listed nearly a dozen items that burn a big hole in the average consumer's pocket. Are any of your pet peeves here?
-Movie Popcorn: Movie popcorn can cost as much as $1 an ounce – or $16 a pound. That’s more than filet mignon. The kind you microwave at home costs less than 10 cents an ounce – or $1.60 a pound. (You can’t even buy hamburger for that!)
Solution: Three little words: Bring Your Own.
-Bottled Water: Glaceau Smart Water costs $5.20 a gallon — or about 870 times the price of tap. In 2009, Congress held hearings on the safety of bottled water and during that testimony we learned that about 45 percent of the bottled water comes from municipal taps. The water companies actually do some additional filtering before they seal it in bottles.
Solution: Someone who wants that extra filtering could buy a filter water pitcher for about $30 (and of course the container to carry your water around with you). After those one-time costs, they would have to replace the filter every two months (or roughly every 40 gallons). The filters cost about $6.50 each – so that’s about 16 cents per gallon – still a much better deal than bottled water.
-Greeting Cards: They cost $2 to $4 – a mark-up of 100 to 200 percent — but probably cost even more in time! How many hours have you spent sorting through an array of cheesy cards looking for the perfect message?
Solution: Send an email greeting instead — do a simple internet search for greeting cards and you’ll get numerous results. Blue Mountain Arts is one of the better-known sites. If you really prefer the formality of cards, buy a box of blank notes (I found a website selling a box of 100 blank cards for $9 – or 9 cents each) and handwrite your special message. Don’t know what to say? Hop online — there are hundreds of websites with appropriate messages for any occasion.
-Printer Ink: As the old saying goes, most printer ink is made up of water plus profit. The American Consumer Institute did a study in 2008 and found refill cartridges can end up costing more than 500 percent of the cost of the printer itself over the life of the machine. Consumers could save $6 billion a year if they opted for printers with lower ink costs rather than machines that cost the least.
Solution: When you’re shopping, compare the life of the ink, not the cost of the machine.
-Restaurant Drinks: Beverages have among the highest markups of any restaurant offerings. At least one New York-area restaurant marks up wine 575 percent, according to Crain's New York Business. And you’ve probably noticed that it costs a lot more for soft drinks, juices and coffee.
Solution: Drink water, and find restaurants that allow you to bring your own bottle of wine.
-Payday Loans: These are short-term, high-interest loans for people who need cash ahead of their next paycheck. But they cost big: According to the Center for Responsible Lending, they typically charge fees equal to 400 percent APR and higher. The average borrower has eight transactions a year — that end up costing more in interest than the original debt.
Solution: Track your spending to the penny for 30 to 60 days and get your costs in line with your paycheck – or ideally, below it. If you must borrow, you are actually better off using credit cards, which have an average APR of 15 percent, than using a payday loan.
-Taking the Family to a Baseball Game: The average cost for a family of four to go to a major league game in 2010 came in at $95, according to the annual Fan Cost Index™ put together by ISM Media. That includes two adult average-price tickets, two child average-price tickets, four hot dogs, four small sodas and parking. Those are averages; the same package at a Boston Red Sox Game will set you back $270.
-Solution: Enjoy a barbecue at home before you head to the park, or check out the lower-cost — but still enjoyable — minor league games.
-Anti-Aging Skin Products: A few years ago, shoppers put their names on a waiting list to pay $350 for a one-ounce bottle of Dior anti-aging cream at Saks. Meanwhile, a Consumer Reports study of anti-wrinkle creams ranging from $18.99 to $335 found a group of products Olay were the best among nine surveyed and cost $57. (The study also noted that participants in the study had a difficult time finding major differences between the products. Dior was not among the creams studied.)
Solution: Do your own blind comparison of several brands and see which one works best for you.
-Dry Cleaning: Most people have had the experience of buying a special piece and realizing that they pay for it several times over in dry cleaning bills. Households spend an average of $1,500 a year on dry cleaning, and 65 percent of those clothes are washable, according to one study. Wool, cashmere, silk, rayon, polyester and spandex can all be laundered. The manufacturer washes the fabric before it’s made into a garment; the "dry clean only" label protects them from liability.
Solution: Use the delicate or hand wash cycle and cold water, and a gentle fabric care product. Lay wool and cashmere flat to dry; everything else, including cotton and linen, can be thrown in the dryer on a low-heat setting, then pressed. Suits should be hung up immediately, aired out, and spot cleaned with a lint-free cloth. Follow that routine, and you can limit dry cleaning to two to four times a season.
-Prescription Drugs: A Consumer Reports study found prices can vary by as much as $100 for the same prescription drug – and only about one-third of prescription drug purchases are mostly or fully covered by insurance.
Solution: Always ask your physician for a generic equivalent, which can cost up to 40 percent less, then shop around. About a dozen states sponsor websites that help you compare prescription prices. Discount stores and warehouse clubs offer the most popular generic drugs for as little as $4 a month, and you don’t need to be a member to fill your prescription at a warehouse club.
-401(k) Fees: Many Americans save for retirement through their company plans, and probably don’t think much about the fees involved. But consider this: Over 30 years, an extra 1 percent in fees can devour 20 percent of an individual’s nest egg. There are fees at the plan level for record-keeping, trustees, audits, and fees associated with your investments inside the plan.
Solution: The website BrightScope.com reviews and rates large company 401(k) plans. If your plan is ranked poorly, click "Help improve the plan" to get specific steps to make your company 401(k) a better deal for employees.
What overpriced product annoys you most?