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Wed Dec 26 2012 16:41:48

Does Online Price Profiling by Retailers Bother You?

By: Julia Wilkinson

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Some major retailers offer different prices for the same item to different customers via their websites based on a number of factors, including the user's zip code and distance from the retailer's competitor store, according to a recent study by The Wall Street Journal. The Journal found that several companies, such as Staples, Discover Financial Services, Rosetta Stone Inc. and Home Depot were adjusting prices and displaying different offers to different users based on a range of characteristics.

For example, the Journal testing found that the exact same stapler from Staples.com cost $14.29 and $15.79, respectively, when ordered from different zip codes. Staples.com showed higher prices most often - 86% of the time - "when the ZIP Code actually had a brick-and-mortar Staples store in it, but was also far from a competitor's store," according to the Journal.

Sometimes the different prices were based on broader geographical factors: for Rosetta Stone, for example, offered discounts of up to 20% for people who bought "multiple levels of its German lessons from certain locations in the U.S. or Canada," but not from the U.K. or Argentina.

Some sites, for example, gave discounts based on whether or not a person was using a mobile device. A person searching for hotels from the Web browser of an iPhone or Android phone on travel sites Orbitz and CheapTickets would see discounts of as much as 50% off the list price, Orbitz said. (That price difference jumped out at me the most. Orbitz even calls these "mobile steals.").

But offering different prices to different people is not illegal, with a few exceptions for race-based discrimination and other such sensitive situations, acknowledged the piece. And several companies pointed out that their online price adjustments simply "mirrors the real world." For example, it's common to find a gallon of gas is cheaper from one town to the next, even at the same chain.

But price-changing online "isn't popular among shoppers," according to the Journal. Some 76% of American adults have said it would bother them to find out that other people paid a lower price for the same product, according to the Annenberg Public Policy Center at the University of Pennsylvania.

How about you? Does knowing different people may be getting a better or worse deal on the same item bother you? Or does the not knowing whether you are getting a discount or not bother you? Or do you not really care either way? Post a comment here!




Comments (16) | Permalink

Readers Comments

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: Nolle

Wed Dec 26 17:43:31 2012

I had to think about this a bit.  At first it seems okay, but I don't think it is.

Imagine if people in the ''bad part of town'' paid less for the same item, at the same webstore, than the upscale part of town, and the local news reported this.  The analogy to a physical store location doesn't work since anybody can drive across town and get the lower price if they choose.  But in this scenario, you are being forced to shop at the ''high end'' store based upon where you live with no choice at all.  

An accurate analogy would be going to your local Walmart and the price that rings up is different based on  your home zipcode.  I don't think that would, or should, fly.

In fact, I think it will be described as ''price discrimination'', and if it isn't illegal now, I'll be it will be in the future.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: Basset

Wed Dec 26 18:29:10 2012

Although I like to hunt for bargains on the internet, as sites like Google & Amazon gather more & more info on us, it makes you wonder if the ''bargain'' is tailored to your demographics.

I did run out of a fave French (not French's:) mustard yesterday. The last time I purchased a multi-order of it, I got it on Amazon.

Amazon sent me an email last night - featuring my mustard! I know it had to be a well-timed coincidence, but geez - I really did take a minute to wonder  how they could possibly know I ran out of mustard!

Of course the microwave could be transmitting secret signals to them!

Walmart does have different pricing from store to store. Although I'm guessing prices are based on each store demographics, I especially notice the difference from the Walmart Neighborhood Markets & the larger stores.

While it is not the grocer I use the most, I do buy certain items - brands from them over & over. Distilled water is one item that varies price from store to store.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: elpereles

Wed Dec 26 21:06:11 2012

Interesting. So if one of this sites offers "free" can technically manipulate prices to cover it.  

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: ejholden This user has validated their user name.

Thu Dec 27 00:40:21 2012

This happens all the time in the Australian retail grocery industry.
Prices for identical items vary depending upon the socio-economic level of the stores catchment area & proximity of competitive outlets.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: BobNJ This user has validated their user name.

Thu Dec 27 02:06:43 2012

There's another angle to this too. I've seen different pricing for the same item on the same website using my same mailing address depending on HOW I went to the website. For example, if you go to a website from PayPal's website you occasionally get very different prices than if you went directly to the store's website yourself. Same for going to a website from a search engine result vs going to the same website directly. Check it out!

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: Tiffee Jasso This user has validated their user name.

Thu Dec 27 03:28:26 2012

This is nothing more than the FREE SHIPPING FIB that Ebay and other online sellers sell to buyers.  

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: bitbybit

Thu Dec 27 05:10:40 2012

This has been going on for decades. Certain price clubs have different pricing for the same items depending upon the stores location. Noticed recently in the CVS stores (not sure if they are nationwide) certain items being a $1.00 more. I won't shop in the one CVS store since finding this out.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: Leesantiques This user has validated their user name.

Thu Dec 27 08:53:07 2012

Sure, it bothers me.  When shopping online, why I should I pay more than someone else?  Why should anyone?  Shipping costs might be higher to me based on how far the package has to be shipped.  That's understandable.  But otherwise???

Not fair!!

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: comet This user has validated their user name.

Thu Dec 27 12:27:29 2012

The shipping cost difference SHOULD be clearly spelled out as to WHERE the item will be sent FROM and TO in the pricing scheme.

Other than that I am offended that some one would take advantage of the Net and use it to UPCHARGE me (or downcharge I guess) based on factors beyond my control at the time of purchase--such as where I LIVE and my ZIP code and whether or not I have a "mobile device" and CHOOSE to use it for the particular purchase.  

What if I live at an "Upscale" address but choose to send a package to what the demographers at XYZ Shoppe claim is a DOWNMARKET address?   Should I pay---more?  Or--less?

This has been covered extensively where it comes into play on persons getting mortgages and how it comes down to discrimination against them.

I think there needs to be a great big look-see into this to protect people from price gouging and plain and simple discrimination based on these factors.

NOT IN APPROVAL

Did run into this tho when my son and I were looking to book into a hotel--him from what might be considered an "Urban" area and me from a "rural" one---we were both on line at the same time and got--from the small local hotels OWN site--two COMPLETELY different prices.  I booked in at mine and he--not realizing--booked at his.  We ended up having his refunded.  Wondered how this worked but surely even small local family owned places have access to these services.  

Not a fan.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: Massachusets Howler This user has validated their user name.

Thu Dec 27 13:06:43 2012

This makes it more difficult to comparison shop, this may be the actual goal of the retailers.
Mass Howler

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: Al G

Fri Dec 28 08:50:53 2012

Bingo!

Obfuscation is the mantra of retailing!

The problem is with people having mobile access & "showrooming" puts a stake into that vampire's heart in that instance.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: Al G

Fri Dec 28 08:53:52 2012

Remember the:

LOST OUR LEASE

Everything 50% Off

GOING OUT for BUSINESS

and every other combination of the turnip truck come-ons.

Most likely, people will catch on to the pattern (organics are much smarter that silicons in pattern recognition) & the next round of the game will commence.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: Steevo This user has validated their user name.

Fri Dec 28 12:03:36 2012

This is what never used to go on in the US.  In a Persian bizarre you can expect a rug merchant to quote you an outlandish price and lower it if you don't buy. It's how it always was in that part of the world.

But here in America we generally always got a fair shake. Prices clearly marked on the item.

We never had any fear that ths store would overcharge us, since here in America we knew that if you and I go through the checkout line we will be charged the same.  A fair shake.

Imagine if you went to Kmart and bought a box of Pampers, and they said ''We've never seen you here before, so your Pampers are discounted to $9 since you're a new customer.  But if they had seen you they would be $12.  

The government would be suing them next week if any retailer tried that, but it's actually going on all over.

Directv does it, Time Warner Cable does it, and all the airlines do it. Charging different customers wildly different amounts. Changing prices every 5 minutes.

If I check prices at Autozone I find it's best for me to call a store in a lower economic area than I live in.  Prices are often $20 less there. My store then matches it.

A chain store like that, you have an expectation that you would get the same from one same brand store to the next. Not anymore.

I don't like it, I think it is economic discrimination and should be stopped.

It's what crooks do.  Here in America we never had to be on our guard against being cheated.  But now we do.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: Ming the Merciless

Sat Dec 29 17:27:27 2012

This insidious practice is yet another example of what our business schools are teaching receptive, largely sociopathic grad students.

It's called the Screw U business model.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

This user has validated their user name. by: permacrisis

Mon Dec 31 06:53:29 2012

When I bring these sort of ethics issues up to ''the kids'' they simply accuse my generation of being jealous that we didn't ''get to'' do it.

They can't see past the money to the real point , which is wrong vs right. Chilling.

Does Online Price Profiling by Retailers Bother You?   Does Online Price Profiling by Retailers Bother You?

by: Steevo This user has validated their user name.

Mon Dec 31 20:36:22 2012

You really wouldn't believe DirecTV. I go to their website, I get an ad for a whole pile of channels, more than I get, for $39.99.  After I login, it's $130.  Same graphic, dramatically higher prices.  

So they actually with a straight face expect me to pay $130 for what they sell to everyone right off the street for $40.  

I call them up and tell them I can't agree to that, they have every goofy excuse you can imagine.  

That needs to be all made illegal in the US so you order Directv and it's the same as your nextdoor neighbor pays.

You buy an airline ticket you get off the plane with a bunch of people who paid the same as you.

That's completely fair. Any sleazy companies who can't do business on the up and up should just go out of business quietly.  Open a rug sales operation at the Bizarre in Tehran.  



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