There's an old adage that says, "You get what you pay for." But strangely, paying more doesn't always mean you get more. In many product categories, you're actually better off buying the cheaper version of an item. Depending on how you measure value, higher-priced items can actually be a big disappointment when compared against their bargain counterparts.
If you want to avoid diminishing returns on your next big purchase, we've rounded up 10 items that rarely provide a lot of added value over a certain price point.
Multiple studies have found that people can't tell the difference between cheap wine and the "good stuff." The New Yorker even points out that some wines from New Jersey were almost indistinguishable from premium French wines, even though the Jersey wines cost a mere 5% of the expensive French stuff.
There's another danger in overpaying for wine: risk of spoilage. You can even get into trouble when paying a premium price for old vintages. If the wine has been stored improperly, or just happens to be past its prime, then you've shelled out hundreds for a corked bottle that doesn't taste nearly as good as the $9 bottle you could have picked up at the supermarket.
Audio Equipment (Especially Audio Cables)
While some people say they can pick up on minute differences in sound quality, many consumers just can't hear the difference between "audiophile" headphones and cheap headphones. Why pay more for a difference that isn't audible to you? Let's be honest: A $39,000 speaker will give you serious luxury cred, but is it really going to give you as much "bang for your buck" as buying a new car or putting a down payment on a house?
And if speakers and headphones are bad, audio cables are an even worse culprit in the game of diminishing returns. Famous skeptic and TED Talk-giver James Randi famously offered a $1 million prize for anyone who could prove that a pair of $7,250 Pear Anjou audio cables were noticeably better than ordinary audio cables. Needless to say, the makers of those cables never did step up to earn the prize.
The health care system in the U.S. is complex, and fraught with confusing complications. Unlike almost everything else that Americans buy, health care services don't come with a simple price tag, and paying a higher bill doesn't necessarily mean you're getting a higher level of care. A recent article in The Dallas Morning News highlighted the fact that freestanding emergency room clinics often cost thousands of dollars to visit, while urgent-care center visits cost much less for the same treatment.
According to an article posted on Yahoo! Finance, the average markup on cosmetics is 78%. Most cosmetics are made from the same basic ingredients, so paying more money doesn't ensure you're actually getting a product that will last longer, be gentler on your skin, or have any other proven benefit. Elle has a great list of makeup artist-approved cosmetics that deliver great results at low prices.
While it's true that extreme athletes or marathoners may need to spend a little more to get the right gear, the average person who's just trying to be more active can make do with less expensive shoes and workout apparel. Are a pair of $128 Lululemon sweatpants really going to perform noticeably better during your yoga class than a pair of sweats you grabbed at Target?
Tech & Gadgets
These days, the latest smartphone or tech gadget has the same kind of luxury cachet as a great handbag or a designer suit. That being said, there's definitely a risk of diminishing returns when you start habitually buying the very latest device. You're probably buying a smartphone to use apps, and you don't need the latest flagship device to access your favorite ones. You can spend $70 or $700 on a smartphone, and still get pretty much the same app experience. Skipping a generation ensures that you're getting a good experience that provides more bang for your buck.
Speaking of status symbols, having the right pair of designer jeans can definitely help you fit in with a certain crowd. But while they may often look or fit better, they aren't always as durable as "cheap" jeans. This Reddit post offers some good suggestions about finding that sweet spot between design and durability, so you don't overspend.
I don't know about you guys, but I'm the kind of gal who routinely picks the cheap option in those "Splurge vs. Steal" fashion mag articles. It's not even about price, I just usually like the look of the less expensive bags more.
A handbag is a handbag. As long as it holds your belongings securely, and looks moderately nice, your basic needs are met. "But a real leather bag will last longer than a cheap bag made from faux leather," you say. Not necessarily so. For example, polyurethane leather is resistant to water damage. Real leather can stain when it gets wet.
Grocery Store Staples
Putting aside the relative merits of organic and free-range products that are ostensibly better for your body (and worse for your wallet), there are plenty of grocery store staples that are just as good as the name brands. Heck, sometimes they're even the exact same product, which makes paying more for the label just plain silly. HuffPost ran a great feature that used a taste test to identify the major brands behind favorite store-brand items at Trader Joe's.
Okay, some of you are probably going to disagree with me on this one. But if you ask me, at least when we're talking about short flights, there's not much difference between flying coach and flying business or first class. You're all on the same flight. You're all going to land at the same time. While the food might be slightly better in first class, it's still airplane food. And while there may be a little more legroom in the expensive seats, that's less important on short flights. And while early boarding is a real perk for some, others don't even see the point.
Sure, if you're flying from North America to Australia or Asia, you probably want a few more amenities, but the increase in price from coach to first class isn't really warranted on short domestic flights. I priced out a trip from Boston to Dulles on United for next month; economy seats were $69, with first-class tickets starting at $168. Is your flight experience in first class really going to be 143% better for the mere two hours you're in the air?
Readers, what items do you think decrease in value over a certain price point? What products are really worth splurging on? Tell us all what you think in the comments section below!