Five ridiculous markups that we’re going to buy anyway

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Mark ups are the small profit margins that retailers gain when an item is sold. A cornerstone of a free market economy, this very gap is the driving force that measures economic incentive to maximize gain. This same amount covers expenses and overhead costs such as rent, electricity, heating, etc. But, of course, some markups are ridiculously high due to consumer demands. The Business Insider recently found that people are willing to pay unreasonable amounts of money simply for the sake of convenience. For example, house cleaning and snow removal have markups of 5,900% and 3,900%, respectively. Below are five of some ludicrous rip-offs that we encounter regularly:


1. Movie theater popcorn

No outside food or drinks allowed. You’re trapped, for 3 long, dark hours, with only one option for food or beverage.  When you pay $6 for a medium-sized bag of popcorn in theaters, you’re paying a 1,275 percent mark up compared to the cost of buying three 3.5-ounce bags of microwaveable popcorn sold in a box for about $3 at the store. The average movie theater makes 40 percent of its profits from concessions, even though it makes up only 20 percent of sales. Remember: always bring a bulky ‘jacket’.

2. Text messages

Those of you without iMessage or other unlimited messaging plans will know that limited texting comes at a heavy price. According to the Chicago Tribune, outgoing 160-character text messages on a cell phone typically costs users 20 cents, while it only costs carrier companies about three-tenths of a cent to process. That’s a 6,000 percent marked up profit.

“Six hundred text messages contain less data than one minute of a phone call,” stated Consumers Union policy analyst Joel Kelsey at a hearing before Congress in 2009. If text data rates applied, he said, a brief cell conversation would cost customers $120.

3. Starbucks Pumpkin Spice Latte

Autumn is here, and so is the heralded Pumpkin Spice Latte. For a drink that is essentially just a mix of cinnamon, ginger, allspice, nutmeg and cloves–no actual pumpkins, mind– the PSL is by far the most popular seasonal beverage in its lineup.

At the price of about $4 for a 12-ounce tall size, the PSL means at least $80 million in revenue this fall for the company. (Forbes) The syrup that Starbucks uses to create these lattes (which is essentially just syrup over steamed milk), is a pumpkin spice sauce, made by Fontana, that sells for $21.95 for 63 ounces. Starbucks helpfully adds that it’s good over ice cream, too.

4. MVHS Parking Permits  

Just this year, prices for the parking permit saw a 60% increase, from $25 to $40. That’s ridiculous.

5. College Tuition

If you want to talk inflation, look no further than the hefty price of college. It’s no surprise that tuition is expensive, public or private, but just how much are we willing to pay?

According to the College Board website, when room and board are included, “total charges at public four-year institutions rose more rapidly between 2003-04 and 2013-14 than they did during either of the two preceding decades.” Also according  to Gordon Wadsworth, author of The College Trap, “…if the cost of college tuition was $10,000 in 1986, it would now cost the same student over $21,500 if education had increased as much as the average inflation rate but instead education is $59,800 or over 2 ½ times the inflation rate.”

Consider California, which saw vast tuition hikes in recent years. Over the last five years, California’s four-year state schools have raised tuition and fees by 57 percent, but over the past year, the system has managed to cut its tuition and fees by 1 percent. That makes it one of 13 state school systems that lowered their tuition and fees over the past year. (US News)

For a country that considers education to be the greatest equalizer, these costs just don’t add up.


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