JACKSONVILLE, Fla. — In the digital age, we all know our data is out there, but did you know it could determine the price you pay?
An Action News Jax investigation found that companies could use the information they gather on you to charge more when you’re shopping online.
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If one person is an impulsive buyer and another a bargain hunter, they may be charged differently for the same item. If one person lives in a nicer neighborhood than another, they may be charged a different price for the same item. It’s called surveillance pricing, but consumer advocates call it price discrimination.
When shopping in person, buyers know the price they see is the price they get, but behind a smartphone or computer screen, it could be a totally different story.
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As the ease of online shopping lures more customers into the digital realm, an entire industry makes money by tracking the way buyers spend their money.
“Companies know so much about our online shopping habits …” that they “have very, very granular, detailed, robust profiles about us as consumers,” said Sara Geoghegan with the Electronic Privacy Information Center, or EPIC.
She said your shopping habits, demographics, wealth, or location are all factors retailers know and use when deciding the price you pay.
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“This is why it’s such a nefarious practice,” Geoghegan said. “You don’t know - this is opaque. It’s impossible to know for the average consumer.”
For shoppers like Amy Booth it’s upsetting.
“That’s manipulation,” she said. “And there’s a lot of manipulation that goes on in the internet.”
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In January, the Federal Trade Commission published a study that shows it’s happening. It found the goal of what’s called surveillance pricing is to maximize profits by charging customers the most they’re willing to pay, which is different for everyone … and where your data comes into play.
“They can track what I’m purchasing,” Booth said, “and if they can show, they can charge me whatever price they want, I’m not going to know unless I do a lot of research. So it comes down to how much time do I want to invest in saving $10 or $50.”
Action News Jax tried to catch it on camera. Teaming up with our sister stations from around the country, we asked dozens of shoppers in eight cities to check the prices of six products, three times a day at some of the nation’s most popular stores.
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Nearly all of the prices stayed the same the entire six days, but we did see some differences within our group on a few different items.
In Orlando, the cost of a grill at Lowe’s went from $299 to $369 after a few days for one colleague. For everyone else, it stayed at $299. And one shopper near Atlanta saw the same thing. The price seemed to fluctuate depending on location, even places just a few miles apart.
Our experts said it would be impossible to confirm the reason for the price differences we spotted, because the retailers use so many different factors in setting their prices. But regardless of the reason, shoppers say they aren’t thrilled by the prospect of a personalized price tag.
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