For years now, merchants have tracked individual online shopping habits to personalize their websites and attract customers. That also helps them make assumptions about income and spending power. But a new study says some companies are going beyond that by using what they know about each shopper to set different prices for the same product.
You may have noticed while shopping online your computer seems to know exactly what you're looking for. That's because companies track your search and purchase histories to make guesses about what you like.
But a Northeastern University study shows companies are also using information about how you're shopping online to customize prices.
"Many E-commerce sites will give deals or change the prices for people using specific devices or browsers, or will change the order of search results to highlight more expensive items," said Asst. Prof. Christo Wilson.
For instance, you get an average discount of $15 if you use an iPhone to look for hotels or plane tickets on Travelocity. But not if you're using a desktop computer.
Researchers found a random search on Home Depot's website using a desktop averaged $120 an item. But the same search on an Android or iPhone averaged $230 per item.
Home Depot had the largest percentage of different prices for the same products in the study, followed by Cheaptickets, Orbitz, Priceline, Sears, J.C. Penney, and Macy's.
"The difference in the real world is that these practices are transparent," said Wilson. "But on the internet you don't know what's going on. So you go to a website and search for a product and you don't know if those products have other prices that are available, or if there are products being hidden from you."
Customizing prices isn't illegal. But when Orbitz was discovered steering Apple computer users towards more expensive hotels, the company stopped doing so.
The researchers say if you want to find the very best deals, try doing the same product search using different devices, or enlist the help of a friend.
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