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21 August 2020

Face masks: uncovering the markup

Why high markups at some retailers mean shoppers pay a premium.

Complaints about high prices for disposable face masks have hit headlines since the latest Covid-19 outbreak.

Shoppers have reported packs of 50 face masks being sold for $100. At $2 each, that’s more than twice the price we found masks selling for before the recent move to levels 2 and 3.

Most complaints we’ve received have been about prices charged by pharmacies, followed by hardware stores, with prices as high as $3 a mask.

What’s behind the hike?

Pressure on global supply chains and changes in wholesale prices are responsible for some of the hike. But the markups added by wholesalers and retailers contribute to the price consumers pay.

One wholesaler recently listed its prices at $60 for a pack of 50 masks. That price included a wholesale markup of about 20 percent.

Retailers will then add their markup on top. Retail markups we’ve found on face masks have been as much as 70 to 80 percent.

Stores are free to set their own prices and markups of this size aren’t uncommon in the retail trade. But they’re hard to justify when retailers are selling essential items that are flying out the door.

Given the big increase in mask sales, stores should still be able to cover their costs and make a profit even if their markup was lower.

Our advice

  • If you think a retailer is charging over-the-odds for a face mask, let us know. You can also report it to the Price Watch site, run by the Ministry of Business, Innovation and Employment.

  • You don’t need to pay top dollar for a mask. If you can’t afford a mask or can’t find any in-store, you can make your own or use something else as a covering – such as a scarf or T-shirt.

  • It’s important to remember that face masks don’t provide bulletproof protection against coronavirus. Washing your hands and covering coughs and sneezes are as vital as ever.

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