(MoneyWatch) Consumers have become accustomed to thinking that online means discounts. That can be true, but making purchases over the Web can just as easily result in being gouged by e-commerce retailers.
Although Internet shopping may seem transparent because of technology, those same technical capabilities leave a lot of room for price manipulation. It's not illegal, but it generally means that you could pay more for an item that other customers do.
In physical stores, everyone sees the same product prices -- they're on shelves and products themselves. A retailer might offer coupon specials to only a select portion of its customer base, but by and large you and your neighbor will pay the same amount this holiday season for, say, the optional accessory pack for that must-have toy.
Online, things are different. Although there is a degree of price transparency and you can compare what different retailers will charge for the same item, that's only while you are doing your research. Practically speaking, when immersed in an e-commerce site, consumers are at the mercy of the retailer.
As ever, merchants generally want to charge the highest possible price (although there are times when companies will charge below-market rates, or even take a loss, such as when they are trying to quickly build their market share). When all customers see the same price at the same time, pricing decisions are made globally. But when retailers have a consumer alone, they can use behavioral marketing techniques to decide how much they can likely charge.
The more a seller knows about you through browser "cookies" that help track shopping habits and online tracking, which can follow your every move across the Web, the more readily the retailer can finely adjust prices upwards to maximize its profit. The less the retailer knows, the more it falls back on lowering prices to get business.
To even the odds, there techniques you can use to foil this data collection edge and get the retailer to offer you lower prices. Here are several suggestions from Abine, a provider of online privacy tools, for ways to keep prying e-commerce eyes at bay:
Use privacy tools to block online tracking. That might seem self-serving since Abine is in that business, but that doesn't mean it's a bad idea. The company's DoNotTrackMe addon is highly rated by MoneyWatch's sister site CNET and available for Firefox, Chrome, Internet Explorer and Safari.
Clear cookies from your browser before you start shopping. E-commerce sites typically require cookies -- they want to track you, after all, and cookies can also enable shopping features like setting online preferences. Clearing cookies (check the "help" file for your browser if you don't know how to do this) flushes all the stored history retailers rely on to gauge when they can increase prices.
If you have an account on a retailer's site, put an item you want in the shopping cart -- then abandon the cart. Not all, but many, retailers will eventually follow up with a better price in an attempt to clinch the sale. That follow-up offer isn't guaranteed, of course, and it can take a week or more to receive an offer via email, as the retailer is waiting to see if you'll return.
A couple more suggestions for savvy online shopping. First, try using your browser with a high security setting that blocks cookies. Many sites will balk, but it's worth seeing if you can use the site anonymously.
Second, run more than one browser, signing into your account with one and acting like an unrecognized guest with the other. You might be able to catch the differences in pricing. When you do, order the one at the lower price and then sign into your account.
Image courtesy of Flickr user infomatique