Algorithms Quietly Adjust Prices Based On Your Shopping History

If you think you are paying the same high price as everyone else when you shop for groceries...think again. You may be paying more!

Surveillance Pricing: How Tech Algorithms Alter Costs Based on Personal Data

People ordering rideshares or browsing online grocery aisles may assume everyone sees the same price tags, but personal web footprints could be quietly influencing what individual shoppers are charged. Known as "surveillance pricing" or algorithmic "personalized pricing," the practice involves collecting user data to tailor costs according to how much companies “believe” you will pay.

Algorithmic Data Mining and Real-Time Testing

Everything you do online is being watched, and that information is now being taken into consideration when you choose to buy something. According to a New York Post investigation, surveillance pricing relies on algorithms compiling comprehensive digital dossiers on us. By gathering details such as browsing history, comparative shopping behavior, location coordinates, demographic info, and prior purchases, automated systems attempt to predict a buyer's willingness to pay. It is happening everywhere.

Businesses Charge What They Think You Will Pay

The New York Post put the information to the test. They found that comparative tests across major platforms illustrate the resulting price disparities. Rideshare platforms, supermarkets and big box stores all based prices on who you are.

Rideshare Platforms

Simultaneous booking requests from identical locations yielded noticeable price gaps. On Uber, matching trips produced charges of $36.95 for one user and $33.94 for another, while a separate test showed rates of $52.93 versus $47.20. On Lyft, simultaneous bookings for identical routes resulted in one passenger being quoted $24.98 while another was charged $31.95. It has also been reported that prices vary based on your battery storage. Those with little battery life left were quoted higher prices. The idea is that those with low battery life are more desperate to book a ride before their phone dies.

Supermarket Retailers

Online grocery searches at Kroger revealed differing prices for identical pantry items across different accounts, including a one-dollar variance on ground beef ($7.99 vs. $6.99 per pound) and a two-dollar split on deli turkey.

Big-Box Stores

Online listings at Target reflected price shifts for household staples like Spam ($4.49 vs. $4.19) and packaged fruit pouches ($9.79 vs. $8.99) between shoppers in different geographic locations.

Corporate Excuses

Businesses attribute these price differences to traditional market variables rather than individual data profiling. Uber representatives noted that real-time fluctuations stem from precise timing, micro-location GPS data, and supply-and-demand conditions. Kroger and Target officials said they do not utilize surveillance pricing. While it is true that prices do vary from store to store, they did not explain why two people in the same location buying the same thing were charged different amounts.

Regulatory Oversight

Despite consumer frustration, personalized pricing remains largely legal under federal law. Current oversight primarily relies on Section 5 of the Federal Trade Commission (FTC) Act, which addresses unfair or deceptive practices but lacks explicit language banning dynamic consumer pricing models.

Federal Regulators Address Concerns

To address transparency concerns, federal regulators have proposed stricter enforcement mechanisms that would mandate clear disclosures when businesses utilize personal data to customize pricing.