Secrets Of Online Shopping Discrimination

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MIAMI (CBSMiami) – Most people think you can usually find a better deal when you shop online.

But the price you see can be different than what other people see. The type of computer you use, your online search history, even your zip code have all been used by online retailers to determine what price you pay.

In a study conducted by researchers at Northeastern University in Boston, nine out of 16 online retailers and travel websites tested showed different prices or difference results for the same searches.

“I always assumed all the prices would always be the same,” said Liz Owens.

Owens, a busy mother of two, does a lot of her shopping online and was initially skeptical when she was told the prices she sees are not always what everyone else sees until she participated in a test.

Owens, along with six other people, were provided a list of items and had to look them up on the same websites and at the same time.

For most of the items, everyone’s search resulted in the same price. However, it didn’t happen every time.

When Owens looked up a night’s stay at the Caribe Royale Hotel in Orlando on Travelocity on her laptop, she was shown a price of $132 per night. The same search on Travelocity at the same time on a mobile phone came up with a price of $119.

A spokesperson for the travel website said it sometime does offer lower prices for people who use smartphones.

A similar finding was discovered when participants searched Rosetta Stone’s online language software.

Those in the group who searched on a desktop computer were shown a price of $249 for Levels 1-5 of Mandarin Chinese. Those who used a mobile device were offered the same products for $189 – a $60 difference.

“I think that is shocking,” Owens said when seeing the price difference. “We did the search at the exact same time and I got a much higher price.”

However, it wasn’t always a case of desktop versus mobile. Sometimes it was where a participant was logged on from that made a difference in price.

When Owens priced a GE 7-foot Christmas tree on HomeDepot.com with free home delivery anywhere in the U.S., her price was $399. When the same item was priced on the site from Boston and Minneapolis the price shown was $438.

Home Depot said sometimes it does offer different online customers different prices based on the region where they log-on from. The company said it can figure out one’s location from a computer’s IP address.

Researchers found 9 of 16 online retailers use “price steering” or “price discrimination”

“You as a consumer are just looking at a website and really have no idea why it’s showing you what it’s showing you,” said Christo Wilson, who along with his team of researchers at Northeastern University collected online shopping search results from more than 300 people.

Based on their findings, Wilson said they found cases of “price discrimination” and “price steering”

Price steering is when two users receive different product results or the same products in different order for the same search.

Price discrimination occurs when two users receive different prices for the same search results.

Wilson tested 16 online retailers and travel sites and found on nine of those sites customers saw different results and or prices

When you log onto a website, companies can see your search history, your clicks, the type of computer and browser you use, and even determine your location. All of this, according to Wilson, can be used to personalize prices online.

Wilson said price discrimination is becoming more prevalent and sophisticated, although; he added it can be very difficult for online shoppers to detect.

“This is a real challenge for us and for consumers because companies are always experimenting with different strategies and algorithms,” he explained.

What can you do to figure out if the price you see is the lowest price?

There’s no perfect solution, but here’s a start.

When looking for the best deal look it up on your desktop and using your mobile phone. If you think shopping in “private” or “incognito” mode is going to hide your information from online retailers, it doesn’t.

Computer security expert says to hide your identity when shopping online use a Virtual Private Network (VPN). You can download some VPN services for free. Better ones will cost around $20-30 a year.

Comments

One Comment

  1. Jim Spencer says:

    Using a VPN simply replaces one identity for another.

  2. Charles Dil says:

    I researched a flat screen on Amazon on two different days and the price difference was obvious, if fact it was different enough that I thought I was looking at a different model.

  3. Sounds like France. When I went to France while in the Navy, the price a customer pays depends on whether he’s American or not.

    1. Higher prices for Americans in France is different. In that case, it’s a form of tribal discrimination where members of a tribe treat non-members worse. In fact, most Americans are unaware of it, because in the US we treat individuals based on who they are, while in the rest of the world, the groups to which you belong identify you, which tribe you are in, and how people in other tribes will treat you.

      For the online retailers, it’s trying to recognize richer customers and presenting a higher price because they believe they can still get the sale, because the price isn’t so important to them.

  4. Ford Hanson says:

    Learn how to use the privacy or incognito feature on your browser. When you use that they cannot get a certain amount of info about you. It is a one click thing and you can have two windows open to check things. I use this on Amazon all the time. I get wildly different results too quite often.

  5. I use the Ghostery extension on my browser ( Firefox) Blocks all ad trackers and then some. Right now on this site it’s blocking 21 trackers !

  6. It’s this kind of abuse that will trigger Federal involvement in regulating the Internet. Once you find a justifiable reason, then you’ve set the precedent for involvement and the flood gates open.

  7. Wm Layer says:

    AMTRAK and the airlines pull the same stunt. If you check the price from the same computer more than once the price goes up.

  8. Joe Ingram says:

    “When Owens priced a GE 7-foot Christmas tree on HomeDepot.com with free home delivery anywhere in the U.S., her price was $399. When the same item was priced on the site from Boston and Minneapolis the price shown was $438.”

    That’s something totally different from what the article is talking about. Many stores price things differently by area. If you go to Lowes website, keep switching stores in you area and you’ll see different prices. Some stores closeout items before others.

  9. Stuart Thayn says:

    Actually, brick and mortar stores do this too. There are 2 Walmarts near my house. When you compare prices from one to another, one of them is usually 10% or more higher than the other. I was told that was because the prices are based on the area and the volume that each store does.

  10. It’s not discrimination. It’s analytics determining price. Nothing wrong with that. STOP WITH THE CLASS WARFARE BRAIN WASHING!

  11. That’s nothing. Get a price at Best Buy online and just go to your local store. When the price shows higher at the store, they’ll open a fake Best Buy web site and show you the higher price. No more Best Buy for me!

  12. Sean Harshey says:

    This story implies some evil motivation. It’s not price gouging or anything of the sort.

    If someone searches for a product in a location where the retailer has a competitor selling the same or similar item, the retailer may drop the price in an effort to entice the purchase and pick up make a profit on other associated items that might be purchased along with the sale.

    Likewise, if someone is on a smart phone, there’s a chance that the person is actually at a retail location checking around before making a purchase. In that case, the retailer is tempting the buyer out of a competitor’s store and into their own for the purpose of – again – making a sale on other items in spite of taking a lower price for the searched-for item. Think about it. How often is someone on a desktop computer standing in Home Depot? They’re on their cellphone or in a car somewhere.

    It’s a business. The retail business is cut-throat. There’s nothing wrong with figuring out ways to undercut competition. That’s all this is.

  13. If I was tech saavy I would use this as a business opportunity. VPSN Virtural Private Shopping Network.

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