The dance is old as commerce. But big data technology has given an advantage to sellers. They can follow data about you and your activities and use a technique called price discrimination to increase prices when they think you won't balk. Prices can vary by many factors: where you live, financial profiles on you, prior purchases, when and where you place an order, browsing history, and much more.
It's also easier to do online because companies don't display one price that everyone sees. Amazon has used price discrimination for many years. One blogger even found through experimenting that having an Amazon Prime membership could result in overall higher prices, and that's after the annual fee.
Others have caught on. Earlier this year cam news that Uber was adopting price discrimination tactics.
This isn't illegal, but it does mean that you may be paying more for products than necessary without getting any additional benefit. You can't completely eliminate the possibility. But you can minimize its effectiveness and start keeping more money in your pocket. Here are some steps to take. No single one is guaranteed to work all the time because sellers vary in the software and techniques they use. But creating a new habit in how you buy is bound to help.
1. Make yourself invisible
Online sellers depend on services that track you everywhere on the Internet. The more information available on you, the more accurately the most sophisticated retailers can tweak prices to get to the maximum you might pay. Set your browser to clear your browsing history, eliminate tracking cookies, and block ads and some other tracking mechanisms. Use the stealth browsing mode and sign out of services like Gmail, Google, and Facebook so they can't follow. Look for browser add-ons that can reduce the amount of tracking. And look at the privacy settings of your social media accounts.
2. Use VPNs to confound algorithms
Virtual private networks create a tunnel through the Internet and can appear to come from somewhere else. Some studies have shown that where your computer appears to be can affect the prices you receive. One reportedly showed that prices for identical goods were lower in Boston than in less-populated parts of Massachusetts. Experiment with appearing to be in different locations to see where the prices come in lowest. Once you have a good price, you can log in and purchase.
3. Use multiple browsers
I regularly run multiple browsers if I'm looking to buy something significant and think that price discrimination could play a factor. I'll have one where I'm logged into some service like Amazon and another where I appear as an unidentified guest. That lets me compare prices within the same service. You can always log off the first browser and log into the second if the price is favorable.
4. Compare to other sources, online and off
Always compare prices between different sellers when possible or look for alternative services. As an example, instead of assuming that Uber is the only transportation option, look at the same trip from Lyft or others. Also, look offline as prices in general can often be the same. But because physical stores show the same display to everyone, there's less room to push prices up.
5. Consider where you stop before you go to an online store
One technique used by pricing software is to examine what site visitors went to before. Depending on the retailer's systems, a stop at a recognized discount seller can result in lower prices because you're considered price sensitive. You can use multiple browsers, as mentioned above, to test whether it makes a difference for a given seller.
6. Use comparison shopping services
There are online services that monitor prices, sometimes factoring in shipping as well, across many sellers and categories of products. Of course, levels of service enter into the equation and you need to check the reputation of online sellers and service providers. Getting a lower price at the cost of your overall satisfaction isn't a good move. But knowing relative pricing is a great way to stay ahead of the game.