Online retailers customize prices to make you pay more

Nov 17, 2014, 8:37 AM | Updated: 8:37 am

Online shopping websites manipulate search results or modify prices without the consumer’s knowledge, leading to some shoppers paying more than others for the same product, a new study finds.

As the holiday shopping season gears up, online consumers may want to know the prices they pay depends on the user’s location, search history, device using or membership status — common practices called price discrimination and price steering.

And there is little the consumer can do about it.

Professors Christo Wilson, Alan Mislove and David Lazer of Northeastern University “examined 16 popular e-​​commerce sites (10 general retailers and six hotel and car rental sites) to measure two specific forms of personalization: price discrimination, in which a product’s price is customized to the user; and price steering, in which the order of search results are customized to the user,” reported a Northeastern press release.

“Overall, we find numerous instances of price steering and discrimination on a variety of top e-​​commerce sites,” the authors wrote, according to Northeastern.

Northeastern researchers found prices customized on four retail and five travel sites, “including cases where sites altered prices by hundreds of dollars. Overall, travel sites showed price inconsistencies in a higher percentage of cases, relative to the controls,” stated the Northeastern press release.

“For instance, the study found, users logged in to Cheaptickets and Orbitz saw lower hotel prices than shoppers who were not registered with the sites. Home Depot shoppers on mobile devices saw higher prices than users browsing on desktops. Some searchers on Expedia and consistently received higher-priced options, a result of randomized testing by the websites. Shoppers at Sears, Walmart, Priceline and others received results in a different order than control groups,” reported Time.

“Earlier reports had documented individual quirks: Staples might charge you $1.50 more for a stapler depending on your ZIP code. The CEO of Orbitz once acknowledged steering Mac users to fancier hotels,” said Dan Weissman of Marketplace.

The Wall Street Journal in 2012 did a study on price discrimination and discovered that “prices change, products get swapped out, wording is modified, and there is little way for the typical website user to spot it when it happens.”

Researchers say that price discrimination is an economic reality. “Regular shops routinely adjust their prices to account for local demand, competition, store location and so on. Nobody is surprised if, say, a gallon of gas is cheaper at the same chain, one town over,” stated the journal.

In his Washington Post article, researcher Christo Wilson said that consumers could do some basic things to beat the retailer ploy. “If you are looking for the best deals and are willing to work for it, we recommend searching for products in your normal desktop browser, an incognito or private browser window and your mobile device,” he wrote.

“Surf on a PC, not an Apple. Start by visiting a price-comparison site, then — on arrival on a seller's site — feign interest in its cheapest stuff. Having made your choice, dawdle on your way to the checkout page. The Internet may make price discrimination easier for retailers; but in online stores, as in bricks-and-mortar shops, two can play at that game,” reported The Economist.

[email protected] | Twitter: @debylene

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

(From left: AP Photo/Gregory Bull; Facebook Photo/Katie Hobbs)...

Katie Hobbs says container wall at border gaps not best use of Arizona resources

Democratic candidate for Arizona governor Katie Hobbs said state resources at the southern border would be better used on measures that weren't "political stunts," referring to shipping containers put in place at wall gaps.
10 hours ago
(Facebook Photo/Arizona School Boards Association)...
Griselda Zetino

Why Arizona voters should pay attention to school board candidates

James Bryce, president-elect of the Arizona School Boards Association said candidates may play a huge role in the education of K-12 students.
10 hours ago
(Facebook Photo/Tovrea Castle at Carraro Heights)...

Tovrea Castle tour in Phoenix opens spring 2023 ticket lottery Saturday

The spring 2023 ticket lottery for the Tovrea Castle at Carraro Heights in Phoenix opens Sunday and runs through Oct. 15.
10 hours ago
(Pexels Photo)...
Luke Forstner

Prop 209 would make changes to Arizona’s debt collection rules

Arizona's Prop 209 aims to protect people with loans when they are struggling to pay, but opponents say it would make credit harder to get.
10 hours ago
(Portal Warehousing photo)...
Wills Rice

35,000-square-foot facility in Tempe open to local e-commerce merchants

Portal Warehousing announced Tuesday the opening of a warehouse and logistics space for small business, e-commerce and industrial merchants.
10 hours ago
(Luis Gandarillas/Getty Images)...

Scottsdale, Tempe ranked among best cities for people with disabilities

Two Valley cities both made the top 10 list of best cities for people with disabilities in a recent study by personal finance website WalletHub.
10 hours ago

Sponsored Articles


Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.
Sanderson Ford

Don’t let rising fuel prices stop you from traveling Arizona this summer

There's no better time to get out on the open road and see what the beautiful state of Arizona has to offer. But if the cost of gas is putting a cloud over your summer vacation plans, let Sanderson Ford help with their wide-range selection of electric vehicles.
Day & Night Air Conditioning, Heating and Plumbing

Most plumbing problems can be fixed with regular maintenance

Instead of waiting for a problem to happen, experts suggest getting a head start on your plumbing maintenance.
Online retailers customize prices to make you pay more