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Ten Biggest Markups and How to Avoid Them


Why pay a 1,000% premium when you don't have to?

Markup can be a killer, especially with a discretionary purchase that makes your heart sing.

The Federal Reserve reports that consumer credit decreased at an annual rate of 10.5% in July and revolving credit decreased at an annual rate of 8%, suggesting that consumers continue to cut back in the economic downturn.

This is countered, at least in part, by reports that states such as Alabama, Georgia, Louisiana, and Tennessee reported small month-over-month gains in retail sales for July.

This may suggest a bottoming out of the economy. However, there won't be any immediate miracles because sales overall remain below year-ago levels.

Either way, it's time to be careful with your money and follow a budget. And a key component of that is to watch out for the markup, or the amount a store or manufacturer has raised an item's price over what it cost to make it. Think of it as money that goes directly out of your wallet and into some company's bottom line.

Of course, when browsing the aisles of Wal-Mart (WMT) or Safeway (SWY) for most routine purchases, most shoppers just want to get in and get out.

Special expenditures can punch a hole in your budget, but so can old shopping habits that few think about.

Next time you buy a small bag of popcorn at the movies, consider that the multiplex could be making a 1,275% profit margin on it. How much did it cost to fill that bottle of water? Most likely a tiny fraction of the $1.25 you paid.

View the slideshow for 10 items that typically come with large markups and are guaranteed to punch a hole in your budget.

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