Most shoppers assume that prices on a given product will be roughly the same from store to store. This is not always the case. Dubner cites research from Cyril Wolf, a Houston doctor who is upset that many generic medications are too expensive for his elderly patients to afford.
Wolf began snooping around and found that two chains, Costco and Sam’s Club, sold generics at prices far, far below the other chains. Even once you factor in the cost of buying a membership at Costco and Sam’s Club, the price differences were astounding. Here are the prices he found at Houston stores for 90 tablets of generic Prozac:
- Walgreens: $117
- Eckerd: $115
- CVS: $115
- Sam’s Club: $15
- Costco: $12
Those aren’t typos. Walgreens charges $117 for a bottle of the same pills for which Costco charges $12.
If you’ve always filled your prescriptions at Walgreens, and you’ve never bothered to shop around, how are you to know that you’re overpaying by $100? And even if you did shop around, would it occur to you that warehouse clubs might have the lowest prices? The Freakonomics post includes links to related stories and price comparisons.
The ability to shop around is a fundamental personal finance skill. It’s not difficult, but it requires patience and a little organization. The more expensive the item you’re intending to purchase, the more important it is to shop around. Your potential savings magnify with the cost of the item. (Someday I’ll tell you how I once got bids from 20 roofing contractors, ranging in price from $1200 to $5000.)