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Websites May Vary Prices Based on User Profiles

online shopping imageIf you’re a regular online shopper, you probably already know that your information is everywhere. On your Facebook page, you might have noticed those shoes you were browsing yesterday pop up on the sidebar. A little creepy, right? And yet, we ignore it because it’s become our new normal. But one study by investigative journalists showed that some websites might actually be using your shopping history against you. This shocking discovery showed that based on your spending habits and other factors, some items might appear higher for you, than for your friend who has different (and more frugal) spending habits, or might live one town over.

online shopping image 2Another factor in the study was location. Never think you’re invisible—you’re not, even to a Staples store. One company said that they use the user’s IP address to determine the most appropriate price based on their location. If the retailer perceives that you live in a higher income area, the price comes up by a few bucks. They can also gauge what bricks and mortar competitors might be near you, and thus price accordingly. For example, if you can easily visit a competing store only two miles away, the price will reflect that. In this case, you’re at the advantage.  Unless there is no competitor for miles…then you’re stuck. In that case, shop the competitor’s website instead!

Perhaps most disturbingly, is the prospect that you might be put into a category, based on your shopping habits, if you keep cookies on your computer. Or, if you have an account with the retail website, they know what kind of spender you are. You might be labeled “frugal” or “big spender.” On this, the retailers declined to comment, but the investigators suspect this plays a role. Here’s the million dollar question: Is it fair? Retailers argue that this type of “dynamic pricing” happens all the time—the consumer is just used to it in the physical world. For example, a consumer might expect that gas is cheaper a few towns over because the average income is known to be higher. Why should Staples operate any differently? And what about consumer profiles that do allow for deeper discounts, like seniors and students?

The bottom line is this: as usual, do your shopping homework and delete your cookies.

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