Six Tricks Companies Use to Hide the Impact of Tariffs
As the chaos and confusion surrounding America’s tariff policy continues to mount, one truth remains: Many things will become more expensive . Regardless of what happens to tariffs in the courts or through trade deals with other countries, the prices of many products will rise due to tariff pressure, and they probably won’t go down anytime soon.
Companies know their customers aren’t thrilled about higher prices, and some of them resort to some simple tricks to hide the increased cost of their products from you, keeping the sticker price relatively unchanged while offsetting the tariff costs in other, less obvious ways. Here are six tricks to watch out for if you’re wondering whether the product you’re about to buy will be affected by tariffs.
Compression
” Shrinkflation ” — the practice of subtly reducing the amount of product you get for the same price — is nothing new. Companies have been introducing “new” and “improved” versions of products for years that are simply smaller versions in new packaging as a strategy to hide price increases. The strategy works because few consumers take the time to notice how many ounces or items are in a package.
Companies will likely resort to inflation-reducing strategies with a vengeance to hide the cost of tariffs. By reducing the amount of product you receive, they can keep the price nominally stable while reducing their costs to offset the tariffs they will have to pay. Write down the size and quantity of products you already have at home and pay attention to it the next time you go shopping – you may find that you are getting much less for the same price.
stinginess
A subtle way to offset the extra cost of tariffs? Use cheaper ingredients or components. Reducing the quality of what goes into a product reduces costs, allowing the price to stay the same. A recent real-life example involves Scott’s toilet paper, which advertises 1,000 sheets per roll. The number of sheets has remained the same, but the weight of a 4-pack has increased in recent years from just over 2 pounds to just 1 pound 7.6 ounces . Something has changed—either the thickness of the sheets or the components used in its manufacture—and as a result, a cheaper product is sold at the same price.
Stinginess can be very difficult to spot unless you have old versions and product labels to compare new items to. Here are a few other obvious signs:
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Substitutions: Cardboard instead of plastic components and packaging – cardboard is much cheaper.
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Ingredients: If the first ingredient listed is water, then it’s likely that you’re looking at a cut-down product. Water is a common substitution when other ingredients are cut. Likewise, if a product that was once made with real sugar now contains high-fructose corn syrup, the product has been changed without your knowledge.
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Performance. The proof is often in the performance. If a product you’ve been using for a while suddenly isn’t as good, or starts breaking or wearing out faster, that’s a sign that the company has somehow cheapened the ingredients or the manufacturing process.
Price increase
Tariff cost offsetting doesn’t always happen with one big (and very noticeable) price increase. Gradual price increases over a few months can go unnoticed, and before you know it, you’re paying 25% more for the same product and you didn’t even notice.
Companies sometimes hide these incremental price increases by introducing new packaging that may subconsciously be perceived as a “new” product and visually separate the product from the old price, making it easier to miss.
Excluding what was previously included
One subtle way to hide tariff costs is to include less stuff in the product. One easy way to cut costs on gadgets, for example, is to simply stop supplying batteries. Another is to take printed manuals or instructions and make them digital — a QR code to download the manual instead of a printed brochure. If something you buy stays at the same price but suddenly doesn’t include everything you’re used to, that’s a sneaky way to hide those tariffs.
One obvious way to implement this principle is through packaging: if a product that was previously sold in a box now appears on shelves on a cardboard tray rather than in a full box, or without packaging at all, just with a price tag, this is another relatively inefficient way for companies to cope with tariff costs without actually raising prices.
Mysterious collections
A tried-and-true way to deceive consumers about pricing is to suddenly include mysterious fees . This is most effective for digital and online products and services, where fees may be positioned (and called) differently. The base price of the product remains the same, and unless you’re paying close attention, you may not even notice that your overall costs have increased. If you do notice, framing the price increase as a “fee” implies a lack of accountability on the part of the company — after all, they’re not raising prices, they’re just charging a fee.
Now assembly required
Finally, if you suddenly need flatpack assembly certification for almost everything, you can blame it on tariffs. Fully assembled products cost more to ship, so designing them so you can ship them as nested components allows companies to cut both packaging and shipping costs while passing on the labor costs of assembly to you. So you pay the same price at the store, but then have to pay a little more in the sweat of your brow to actually use the product.