DAYTON — We all know our personal data is out there. But did you know companies could use the information they gather about you to charge a higher price when you shop online?
It’s known as surveillance pricing. Some call it price discrimination.
When you shop in person, you know you’re getting the same price as everyone else. It’s printed right there on the shelf.
But on your computer or your phone, you have no way to know whether your favorite store is charging you more than another shopper for the same item at the same time.
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The News Center 7 I-Team uncovered there’s a whole industry using your data to decide the price you pay.
Valerie Salazar looks for the best deals for her family while shopping online.
“Sometimes I’ll go on Amazon, and I’ll be like, ‘Oh, let me check Walmart real quick,’” Salazar told the I-Team.
But when we told her that companies may be keeping an eye on her and using how she shops, what she buys, and who she is to potentially give her different prices than others, she was aggravated.
“Honestly, I am not very happy about that,” Salazar said.
The I-Team talked to shoppers all over the country about it.
“So, privacy is important, yeah,” Danielle Gooding told us in Jacksonville, Florida. “I mean, am I bothered by it enough? It depends on how bad I want the product. You know?”
The I-Team’s lead investigative reporter, John Bedell, talked to Dr. Riley Dugan, PhD, at the University of Dayton about surveillance pricing.
“Surveillance pricing is basically using information about a consumer, whether it be demographic information, past purchasing history, even mouse clicks on a web page, to sort of determine what is the most they’d be willing to pay for a product,” Dugan told the I-Team. “And then essentially charging them that amount, maximizing profits to the retail establishment.”
Dr. Dugan is a professor and head of the Management, Marketing, and Entrepreneurship Department at the University of Dayton’s School of Business Administration.
“It’s a form of individualized pricing that actually hurts the consumer rather than helps,” Dugan said. “I think it’s really kind of something that maybe people sort of have an intuition that it might be happening to them, but I don’t think they know how widespread it is and how pernicious it is as well.”
The I-Team also talked to Sara Geoghegan, senior counsel with the Electronic Privacy Information Center (EPIC). “This is creepy and invasive,” Geoghegan said. “And ultimately is not for our own good, it’s ultimately for companies to make more and more money and to get us to buy more products and to pay more for those products.”
The Federal Trade Commission (FTC) released initial findings of a study in January showing surveillance pricing is happening. The FTC explored the potential impact on privacy, competition, and consumer protection.
Dr. Alan Mislove was a senior privacy expert at the FTC. He’s currently a professor and Senior Associate Dean for Academic Affairs at the Khoury College of Computer Sciences at Northeastern University in Boston.
“Consumers think this is very unfair,” Mislove told the I-Team. “They feel like they’re getting ripped off.”
The Trump administration closed the public comment request on the FTC study the day after President Trump took office.
The I-Team reached out to the FTC to ask whether the study has been discontinued under the new administration. The agency declined to comment.
News Center 7 tried to catch surveillance pricing on camera by teaming up with our Cox Media Group sister stations across the country.
We asked dozens of shoppers across eight cities in seven states to check the prices of several products online at the same time, three times a day, on the same days at some of the nation’s most popular stores.
We recruited shoppers of varying ages, races, income levels, and shopping habits. We tracked whether they shopped anonymously or logged into store accounts, on store websites, or in their apps.
In many instances, our prices were the same. But not always.
In Orlando, one of our checkers saw a grill at Lowe’s for $369. But everyone else saw the same model for $299.
In Atlanta, the price of that same grill increased by $70 when we changed the location to another Lowe’s store 13 miles away.
A TV at Walmart was priced at $877.95 for some, but $898 for others, including the I-Team’s John Bedell here in Dayton. At one point, the price of the TV dropped to $697.99 in Bedell’s cart within the Walmart app.
But one of our shoppers in Atlanta got a price of $1,047.90 for that exact TV.
The experts the I-Team interviewed for this story said it would be impossible to confirm the reason for the price differences we spotted because retailers use so many different factors in setting their prices.
“Just because you and I receive a different price doesn’t necessarily mean that it is surveillance pricing,” Mislove said. “There are just a million ways that this could be implemented, and you have to be, when you’re doing an experiment, looking for the right way where you actually are using a service that does it, and then capture them doing it. So yes, incredibly difficult (to prove). That’s why it often takes a year or two for us to do a study where we can actually prove it.”
Whatever the reason for the price differences, the lack of transparency or secrecy frustrates consumers.
“Nobody should track your spending habits,” Larry Owens told our sister station in Jacksonville. “That’s like them being in your purse. So, you definitely don’t want that.”
“I never would have thought that ‘Oh, they’re going to charge so-and-so two dollars cheaper than what I’m getting it for,’” Salazar said. “So–not cool.”
The I-Team reached out to all the retailers we used in our price checks.
Walmart and Target both told us flat out that they do not use surveillance pricing.
Home Depot was not as clear, but said it goes to great lengths to ensure consistent pricing, but customers could see differences based on stores and locations.
We asked our experts on this topic what you can do to find the lowest price.
Dr. Riley Dugan at the University of Dayton suggested making a purchase on your desktop or laptop computer instead of on your phone or within a store’s mobile app on your phone.
“The company will be able to know more about you based on your behavior on your mobile phone, most likely, than your desktop,” Dugan said. “So, I would recommend that people, when they do make these purchases, do so over a desktop because that’ll be less likely to be prone to some of these tactics that these companies are using.”
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