The 6 Biggest Consumer Electronics Markups (and How to Fight Back)

What do a grocery store, a funeral home and a college bookstore have in common? They each sell products with some of the highest markups in retail.

While we don’t want to think of a funeral as a financial transaction, the reality is that we all pay a premium for products that are produced for a fraction of the cost. Though there’s nothing we can do about the price gap between wholesale and retail, we can be savvy shoppers and avoid the really high markups whenever possible. Since electronics play a major role in our daily lives, I reviewed six of the biggest markups and how to get these items for less.

1. Text Messaging
These days, we text more than we call, meet or even e-mail, making it the preferred method of communication for this generation. Sending a text costs the provider three-tenths of a cent according to Yahoo! Finance, but will cost the texter $0.20 per message. That’s a 6,000% markup! If you text a lot, make sure you have an unlimited plan or download a free texting app. You can also get a free Google Voice number and request your friends text you there.

2. Ink
A friend of mine recently gave away her Kodak printer because she refused to pay for the $30 ink cartridge replacement. Printer ink represents one of the highest markups of all products, with the per-gallon cost amounting to more than gold, gasoline and champagne. This injustice is the basis for a new comparative marketplace called InkjetWilly.com, where you can find the cheapest price on printer ink by comparing online inventory for both OEM and remanufactured cartridges.

3. Batteries
The last-minute urgency associated with the purchase of batteries is not lost on retailers. When you need them, you need them now and there’s no time for price comparison. This is a mistake, however, since Energizer AA batteries bought in bulk from Sam’s Club will run about $0.39 per battery, while the same battery will cost $0.64 at Target, $0.87 at Walgreens and even more at your local grocery. Ultimately, it pays to price compare and stock up on batteries so you’re not paying for convenience.

4. HDMI Cables
Not everyone is well-versed enough in the electronics to know when they’re being cheated. HDMI cables represent one of the biggest price scams out there, with markups exceeding 100% in some cases. I found a Rocketfish 6’ HDMI cable selling for $39.99 at Best Buy, while the identical cable is being sold online from DanTronics (an Amazon seller) for $7.49. That’s 85% less, or the equivalent of nine Vanilla Spice lattes. C’mon, now!

5. Extended Warranties
Buying an HDTV or laptop is expensive enough, but you’re inevitably pitched an extended warranty upon checkout. The offer is tempting since your purchase is expensive and potentially fragile. However, the basic warranty offered by the manufacturer is plenty; technology is ever-changing and it’s likely you’ll want to upgrade once the basic warranty is finished, anyway. Most experts agree that getting an extended warranty is never a good idea, so don’t fall for this ploy and just be careful with your new purchase. Keep in mind, most major credit cards double the manufacturer’s warranty. So if you’re paying with plastic, check the credit card company’s policy and earn some rewards while reaping the benefits of the double coverage.

6. Smartphone Accessories
You may have scored that smartphone for “free,” but what about the vehicle charger, window mount and heavy-duty case? Ditch this common sales pitch and buy your accessories elsewhere. The popular Otterbox Defender Series smartphone case, for example, is offered by Verizon Wireless for $59.99. Head over to Amazon and the same case will cost you 36% less at $38.45. The same goes with anti-scratch screen protectors for the Samsung Galaxy device: a 3-pack will cost your $12.99 at Verizon or 46% less at Amazon ($6.95). You may also consider scoping out deals for these types of accessories on eBay.

About the Author

Andrea Woroch is a nationally-recognized consumer and money-saving expert who shares smart spending tips and personal finance advice to help transform everyday consumers into savvy shoppers. A sought after media source, she has been featured among top news outlets such as Good Morning America, NBC’s Today, Dr. Oz, New York Times, Kiplinger Personal Finance, CNNMoney and many more. Andrea is a dedicated smart money blogger with stories posted on popular lifestyle and personal finance sites and writes for the New York Daily News Dollar Stretcher as well. You can follow her on Twitter for daily savings advice and tips.

Photo Credit: wrestlingentropy

12 comments to The 6 Biggest Consumer Electronics Markups (and How to Fight Back)

  • Love the tips! Thanks so much. The INK is a real pain, and SO expensive. Excellent that you included all these cool links.

  • Please delete my previous comments. Many spelling errors.

    1. Text Messaging – We have in our family of 4 unlimited text messages for $20. We had limited text messaging for $10 but that was costing us a lot more.

    2. Ink – I used to buy new but now we get it filled at one of the clubs for less than one-fifth of the price.

    3. Batteries – we buy at one of the clubs.

    4. HDMI Cables – Never bought one.

    5. Extended Warranties – this is a total marketing gimmick. Never bought one.

    6. Smartphone Accessories – Don’t own smartphone. No worries.

    Some folks I know have bought smartphones because someone among their friends bought. Smart businessmen should buy smartphone. But the majority of kids buy it if they can afford it without knowing what best it can be used for.

  • Since I used to sell electronics, I know what this is all about. I used to sell so many HDMI cables because I sold them cheap and they worked. I would never pay those crazy retail prices for cables.

  • This is so true, I have experience with almost every point you’ve laid out. I buy my HDMI cable from Amazon or even ebay and pay a fraction of what the large electronic retailers ask for them. I can’t tell the difference on my TV and I doubt anyone can. Ink is another area that I refuse to play their game. I buy refill kits and replace the “chip” that disables the cartridges from being refilled. I recently purchased a color laser multi-function machine, the refill kit cost $50 on ebay and came with the chips for each color cartridge. I’ve already refilled the cartridges and replaced the chips so am ahead of the game. It’s actually fairly easy to replace the chips and refill the cartridges. The only downside is that the machine no longer will tell me the “estimated” remaining toner so I have to set a schedule to top off the cartridges periodically.

  • Huh? Grocery store markups are among the lowest in retail. Grocery stores make money on volume. They sell thousands of products, yet you referenced only one, batteries.

    You claim batteries cost at least 88¢ per AA at a supermarket, as opposed to 39¢ at Sam’s Club. For most of us, when we’re already at the supermarket and remember that we need batteries, it’s easier to pay $1.76 for a pair of AAs then and there than to make a separate trip to Sam’s Club and buy 20 AAs for $7.80.

  • Steven Quinlan

    I can relate to the HDMI story. I needed one about four or five years ago for my brand new TV, and I was offered one with the TV for 9.99£ (about 12-13 dollars). However, having done my research, I knew that Amazon.co.uk was doing a special on cables and bits, and were selling the same brand of cable for 2.99£.

    I presume the US has dollar stores the same way we have pound stores, and I’ve found them to be an absolute money savings delight for certain products when it comes to avoiding markup. Certainly not all of them, but there are definitely items where the pound store has saved me quite a bit of money on markup for exactly the same product, batteries being a big example where I’ve bought 14 regular batteries for .99£, and given the way I use them, will probably last me over a year anyway.

  • On the battery thing, Energizer Lithium Ultimate batteries cost a little more, but last about ten times longer than most batteries. They also store longer. You can save a lot by buying these (I have seen the AA’s at Sam’s).

    As for the HDMI cables, they practically keep most electronic stores in business. Most of the computer systems and electronics at Best Buy are sold at retail. They make their money off the naive customer buying HDMI’s and extra’s. It always amazes me, as I can literally go next door to Ross or Marshalls and get the exact same cable for $5.00.

  • I overpaid for batteries today. I bought a 2 pack of the rectangle ones for the smoke detector. It started to beep and the dogs started to have some sort of a mental meltdown.

    The 2 pack from the hardware store around the corner was $5.49 plus 13% tax but I am sure it was less expensive than dog tranquilizers.

  • Cellphone accessories are things we can live without. Younger generation of today are quite fond of them. yes, and texting a lot too.

  • HDMI leads are a joke, buying them in store costs circa $20 and you can buy the same on ebay for $2!

  • Extended warranties is basically throwing money away. The rule of thumb is that if a TV or computer or any electronic doesn’t break within the first 30 days, statistically it won’t happen in the next 5 years. That’s why return policies that are 30 – 90 days provide plenty of time to protect consumers.

  • Kay

    Another hosejob is cell a phone charger- 3.00 bucks is all they cost at ebay, but at the phone store or retail they sell at 29.00
    The gas stations are full of these impulse quickies.

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