The Hidden Cost of Cheap Products

With over 38 million Americans living hand to mouth, finding cost savings can seem all-important. But cheap products often have hidden costs. Cheap products can wear out faster, have safety issues, cost more in repairs and even have hidden costs built right into their design. Cheap products and services can even make you sick.

Cheap Products and Services Designed With Hidden Costs

Some products are cheap in terms of the up front cost but are designed to get customers to pay a lot more money later. Usually these products take the form of things that lure in customers with low prices but really don’t work without paying a lot of extra money for add ons.

Cheap Video Games and Apps Designed With Hidden Costs

hidden cost of cheap products mobile games

The top 50 or so video games on are all “free” but frustrate players into paying more money later.

One great example of products designed with hidden costs is video games and apps. A lot of so-called “free” mobile apps and video games come with stripped-down features that render the software almost unusable without paying extra for a “pro” version. Similarly, a lot of free mobile games charge extra for upgrades like more powerful weapons or maps that let users access hidden areas of game play.

The top 50 or so mobile games on are all free. However people who don’t pay extra for upgrades often end up getting stuck for ages or losing constantly.

As far as console games go, the popular video game Destiny: The Taken King certainly isn’t cheap, but still costs extra later. The game has created an uproar by selling add ons like extra character classes, armor colors and item types on top of its existing $60 pricetag.

For more on video games that start out cheap and cost extra later, see our article: The Terrifying Future of Video Games Taking Your Money.

Cheap Services Designed With Hidden Costs

hidden cost of cheap products services turbotaxMany other services that promise free or cheap versions are so frustrating that users are forced to upgrade. As an example, TurboTax promises that certain users can do their taxes free online. However, TurboTax’s free version has a low income cutoff, doesn’t pull in data from the taxpayer’s previous year’s return, finds fewer tax deductions and credits and doesn’t include miscellaneous income or phone support. Further, the free version contains ads that pop up and interrupt the flow so often as to be on the verge of nagging. TurboTax customers who start out with the free version often find that they must pay $90 to $140 for upgrades.

Also see: How to File Your Taxes Free Online

Cheap Products That Wear Out Quickly

Another hidden cost of cheap products is when something that costs very little up front wears out much faster than a similar product that costs a little more.

A good example is clothes. For instance a light raincoat from L.L. Bean might cost $70 compared to $30 for a similar coat at Walmart, but Bean’s return policy means you can return it for the rest of your life for any reason and get a new one. At Walmart you might have to buy a new raincoat every 5 years. That would mean a lifetime spend of $240 or more.

Furniture is another good example of cheap products with a hidden cost. While a hardwood coffee table might cost $160 to $500 or even more on Amazon, someone who tries to save money by buying a cheap coffee table for $40 might wind up with something that shows wear and tear a lot more or wears out in three years instead of lasting a lifetime. Check out the list of complaints on a $40 IKEA coffee table from Amazon:

the hidden cost of cheap products furniture

Other products with cheap versions that wear out fast include shoes, boots, sporting goods, lightbulbs, car parts and computer accessories like keyboards, printers or even printer ink. A cheap set of printer ink cartridges might have a lot less ink. For example the five-pack of Epson high capacity ink below costs $63, which is  $10 more than the standard capacity ink set, but it delivers 70% more ink.

hidden cost of cheap products printer ink

Other cheap products that wear out quickly include discount batteries, sporting goods and electronics. Discount electronic peripherals like a cheap iPhone car charger might fall apart in a few days or worse, cause damage to your iPhone. A discount mountain bike may seem like a good buy, only to need a lot of broken parts replaced in a few months.

According to Andrew Forron, owner of New River Bikes in Fayetteville, West Virginia:

“Cheap bikes may seem cheap but in reality they probably cost more. The first issue is usually that they aren’t properly built since the person that put them together may have been putting furniture or store displays together just before building the bike. Chances are the same poor quality tools did both jobs. Once the bike is properly put together and working it becomes a challenge to keep the thing going because all the parts are so poorly made they bend with every use. The cost of replacing one cheap stamped steel brake caliper can often be more than the bike’s purchase price. The wheels are also terrible. I’ve seen them come in missing bearings. Needless to say they don’t roll so well.”

Cheap Products and Services That Are Dangerous

hidden cost of cheap products safety car subaru

The 2015 Subaru Legacy four door sedan with all wheel drive costs more than a lot of sedans but has excellent safety ratings, thus avoiding hidden safety costs.

Some products and services seem like a good deal because they’re less expensive, but the hidden cost is that they sacrifice safety. The bottom line with safety is, any time you’re saving money on a product or service, think through all the possible safety repercussions of your choice. If saving money will have a hidden safety cost, shell out extra for the safer option.

Cheap, Dangerous Cars and Tires

hidden cost of cheap products safety car honda civic

A 2011 Honda Civic CNG four door with front wheel drive can save $11,000 over a 2015 Subaru Legacy, but it has a hidden safety cost.

An excellent example of products in this category is cars. All automobiles are held to certain minimum safety standards by the National Highway Traffic Safety Administration (NHTSA) but above that threshold the manufacturers have a lot of leeway in how much they invest in the safety of each model. For example a 2015 Subaru Legacy four door sedan with all wheel drive gets a five star overall safety rating from the NHTSA with five stars for frontal crash, side crash and rollover tests and costs about $22,000. By contrast, for about $13,000 less you can buy a 2011 Honda Civic four door sedan, but the car has only a three star overall safety rating, with four stars for both frontal crash and rollover safety and only two stars for side crash safety.

Tires are another product where saving money up front can have hidden safety costs. Cheaper tires usually wear faster, which can lead to unexpected tire failures like blowouts or hydroplaning. According to the NHTSA, there are over 11,000 tire related car accidents each year.

On the subject of cars, a free baby carseat may seem like an excellent idea, but second hand carseats are never a good idea unless you know the full history of the carseat. A used carseat that has been in a crash or been left in a car all summer during hot weather won’t protect a baby as well as a brand new seat.

Cheap, Dangerous Electronics and Home Fixtures

hidden cost of cheap products safety extension cord

This counterfeit extension cord has a hidden safety cost that’s hard to spot, because it also has a counterfeit UL safety rating tag.

Cheap extension cords are another inexpensive item with a hidden cost in terms of safety. In 1999 the Consumer Product Safety Commission (CPSC) released a warning about faulty power strips, surge protectors and extension cords sold at discount stores. In 2006 the CPSC issued a recall of Chinese counterfeit extension cords that had a fake UL safety rating and carried an increased risk of electric shock.

Even something as simple as an inexpensive dryer vent can be a hazard if it’s constructed cheaply to prevent excess lint from passing freely out into the air. A dryer vent that traps lint at the opening can become clogged. At the least, a clogged vent will cost more in energy bills as the dryer struggles harder to get your clothes dry. At the worst, the trapped lint could overheat and catch on fire.

Cheap, Dangerous Services

hidden cost of cheap products services mechanicCheap services with hidden safety costs include less expensive mechanics who don’t notice serious issues like worn brake pads, low brake fluid or cupped tires, cheap electricians who cause fire or electrocution hazards or even cheap health insurance policies. A cheaper health insurance premium may seem like a great idea, but if it has less qualified doctors in its network it can end up with hidden health costs later on. Likewise, a young family that opts for a cheaper, high deductible healthcare plan to save money on premiums may end up shelling out thousands for an unexpected pregnancy.

Cheap Services That Cost More in Repairs

Getting a price break on cheap services like car or home repair might save money up front, only to run up more cost later than it would have cost to hire a competent professional the first time.

A discount auto mechanic might save a ton on car repair, then botch your oil change and cost you a new engine. Cheaper mechanics can also take a long time to find a problem, replacing one part after another that doesn’t actually need replacing before finally fixing the issue. By contrast, a great mechanic might charge a little extra per hour but diagnose problems correctly on the first try and fix it right, thus saving money overall. The same goes for electricians, plumbers, carpenters, handymen, landscapers, door and carpet installers, HVAC techs and just about any kind of service pro.

hidden cost of cheap products services basementAs an example of how something as apparently simple as a discount handyman can have a hidden cost in repairs later on, someone who installs the wrong sized gutters on a house can cause a situation where the gutters overflow. This in turn can cause rainwater to collect against the foundation. Since concrete is porous, that water will likely find its way into the basement. In a house with a finished basement this can mean thousands of dollars in carpet replacement and even an entire remodel. A $200 labor savings on a gutter installation can easily result in a $10,000 basement remediation project.

Cheap Things That Create Big Hidden Medical Costs

Sometimes people cut corners to save money up front and end up with big hidden medical costs later. Cost savings that may seem like a good idea at the time can cost not only money but can also sacrifice a person’s health.

The Hidden Medical Cost of Cheap Food

hidden cost of cheap products foodSaving money by eating cheap, processed food can cost a lot more money later than it’s worth. Inexpensive processed foods are often high in sugar and other easily processed carbohydrates. Diets high in these simple carbohydrates have been linked to diabetes and a long list of other health problems, including heart disease and cancer. Cheap, heavily processed foods also tend to contain more sodium and preservatives which have been shown to have detrimental effects on health.

Organically grown fruits, vegetables and meats are more expensive, but have been shown to have less pesticide residues. While the link between pesticide residue and cancer in humans is difficult to prove, it’s generally thought that cutting down the intake of pesticides in humans will lower cancer risk overall.

The Hidden Medical Cost of DIY

hidden cost of cheap products diyDo it yourself home remodeling and repair projects can also have hidden costs. Older houses may contain hazardous materials like asbestos or mold growth. A couple might save a lot of money up front by redoing their bathroom themselves, only to find out they’ve exposed their family to asbestos inhalation from vermiculite insulation behind the walls. Professionals might cost a lot more money up front, but have a better chance of recognizing a hazardous situation right away and dealing with it effectively. This in turn saves on hidden medical costs like chemotherapy for mesothelioma that shows up later on in life.

The Hidden Medical Cost of a Used Air Conditioner

Room air conditioners can cost between $80 and $160, depending on the unit’s size and power. While someone can save a few bucks by buying used, air conditioners are one thing you should never buy second hand. In many cases there’s no way of knowing who owned the air conditioner before or what might be inside it. Air conditioners suck in air, and a used one might be full of harmful mold, asbestos, chemical residue from a small time illegal narcotic manufacturing operation or other inhalants that can make you sick.

Cheap Products That Cost Other People More

hidden cost of cheap products slave laborMaybe the biggest hidden cost of cheap products is the cost to other people. According to a 2015 report by PBS, over 20 million people live in slavery today. Worse, Americans routinely eat food, wear clothes and even use cell phones and computers that contain rare Earth metals all made cheap by slave labor.


Dollar Tree Stores Recall Counterfeit Extension Cords Due to Shock Hazard –

You probably benefited from slave labor today –

The Wealthy Hand-To-Mouth – The Brookings Institution