I-Team: You May Be Paying More Than Others When Shopping Online
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(CBS 11 I-Team) - 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 when you shop online.
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 of Southlake.
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 up by the CBS 11 I-Team.
Cases of different prices for different online customers
The I-Team provided Owens along with six other people a list of items, and then had everyone 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 CBS 11 I-Team did the same search on Travelocity at the same time on a mobile phone and was shown a price of $119.
The CBS 11 I-Team found other cases where the same hotel search on Travelocity resulted in lower prices for people who did the search on their mobile device,
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. CBS producers in Boston and Minneapolis, who also participated in the test, looked up the same tree and was shown a price of $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 (Walmart, Sears, Home Depot, CDW, Best Buy, Priceline, Orbitz, Hotels.com, Expedia, Cheaptickets, and Travelocity).
Wilson said 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 he said has been 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.
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