When you hear from your friend that the flight ticket is priced at $250, you quickly visit the retailer’s website but you find that the same ticket is priced at $300. Now, how is this possible? A study published by Northeastern University in 2014 reports that nine out of 16 major online retail and travel websites are charging customers personalized prices based on the buyer’s online profiles.
While retailer’s call this concept as “personalization”, researchers and customers commonly refer this practice as price discrimination. Online retailers generally utilize the practice of collecting information from customer or shopper’s profiles. By utilizing shopper’s personal details and buying behavior, retailers exercise different prices to different users. This information can be retained from user IP’s and cookies which traces the location and shopping histories.
This concept of “personalization” is illegal in few nationality or country of residence. This discrimination is considered illegal in the European Union based on the customer’s nationality. Major companies in European Union have been scrutinized when suspected of overcharging customers from certain countries. In most countries, price personalization is illegal based on systematic pattern discrimination towards specific demographics. However, when price steering is carried through random selection system, it is not considered to be a criminal offense.
As I said many people believe the online price discrimination is illegal. But the Northeastern University researchers have an otherwise answer to this. They explain it as a bedrock economic principle: Merchants should always try to establish “perfect price discrimination,” whereby a customer is always charged the absolute most he is willing to pay for any given product. Some customers are “elastic,” meaning they have very high price ceilings; others are “inelastic,” and if the price of a product increases just a little bit, they won’t bite.
Though it’s difficult to understand the strategy behind these algorithms of such discrimination, it has been widely acknowledged that this is a part of online reality’s current scenario. A report published in 2014 by White House declared “Many companies already use big data for targeted marketing, and some are experimenting with personalized pricing. You can check this pricing intelligence for more details.”
Several hi-tech companies have started fighting against this trend to regularize online shopping discrimination. The aim of these “anti-discrimination” services is to give original price irrespective of the user’s shopping history and location, so they can rely on the proxy networks to access the websites of the retailers in total anonymity. The question is does this really work? The answer depends on the proxy that you use.
Anti-discrimination services are able to access the retailer’s sites through a traditional proxy network, which operates through recycled IP’s and gain anonymity to attain the untouched price of the item. However, as these proxies were previously used, it is easily identifiable, which means we still are not assured of the price not being modified. In other words, even the traditional proxy networks are not exempted from the risk of the price discrimination.
The ideal way to unmask this discrimination is to use a Premium dedicated proxy. Such proxies will help you get a better deal next time you book online.
But Professor Christo Wilson from Northeastern University, a faculty of Computer and Information Science who has co-authored the research paper on Online Price Discrimination says “I get this question from people all the time: ‘How do I get the best price?’ The truth is I don’t have a good answer,” “It changes depending on the site, and the algorithms they use change regularly. Good advice today might not be good advice tomorrow. The point is that as a consumer, you’re at a disadvantage unless it’s transparent.”
So let us have a reality check. There is no foolproof method or approach to ending online price discrimination. You can use these strategies or a combination of these strategies to add to the favor of finding the least price.
#1 Use Different Browsers
Search for a product using different browsers such as Google Chrome, Firefox, Safari, Internet Explorer. Here is an added bonus by How-to Geeks on how to change the browser’s user agent to fool sites into thinking that they have been visited by different browsers and different versions of those browsers. This is a quick way in testing the price fluctuations without adding any extensions to your browser.
#2 Using Private Browsing or Incognito Window
Websites majorly rely on software called ‘cookies’ to track and monitor what people do online. The data they gather is used to gain the understanding of what prices shoppers see or buy for. But when your browsing through ‘private’ or ‘incognito’ mode websites are forced to show you their default prices and deprives them of any information. Also clearing the browser’s cookies and caches have a similar effect on the websites.
#3 Try Using a Different Device
Try interchanging from the devices you look at the websites for prices. If you are browsing from your laptop, lookout for the same website through mobile devices or tablets and vice versa. Now with business moving away from traditional websites to mobile platforms, retailers are taking notice of this and it may affect the prices shown on the mobile device to be different from the computer.
#4 Be a PC
Strangely enough, the concept of behavioral economics has proved that when you shop anything from Mac, Mac users intend to have higher incomes and spend more online. So many companies charge them higher prices or move them away to the higher priced options while shopping. A Wall Street Journal test in 2012 found that Orbitz displayed higher-priced hotels more prominently to Mac users than to PC users, burying the lower-priced options deeper on the page.
If you have a friend in a different ZIP code, try asking them to do the same search and compare the results. Use a Virtual Private Network or proxy server can be used to change a computer’s IP address to fake a connection to the Internet from a low-income area or a different city.
#6 Add $heriff
$heriff is a browser add-on tool available on Google Chrome, Firefox, and Internet Explorer as a part of a research project on online price discrimination. This extension helps you to show the prices of a selected product across various cities around the world which may vary widely. Another added advantage, users can add this to a virtual private network to make it seem like a purchase is coming from a different location with a low price.
#7 Sign Up
Do not think twice, if a website offers membership, take it immediately. Members often get better deals. For instance, expect to find cheaper flights on United Airlines while logged in as a MileagePlus member than while searching as a non-member. Besides seeing cheaper prices, members often get coupons and other exclusive savings.
#8 Cross-Check Deal Websites
Many sites have different pricing of a product online. Many aggregate low prices, look through them before making a purchasing to see whether they are offering the same deals at other sites. Try looking up the desired item on sites such as Slickdeals, FatWallet, or Brad’s Deals.
#9 Use Price Trackers
Use as many price trackers as possible to get alerts on price fluctuations. CamelCamelCamel tracks prices on Amazon over an item and alerts users of the price drop. Looking at the price graph help us determine what item sells at what time of the week and how expensive or less is it, etc. We recommend you to use pricepinx is a similar price tracking tool to help find alerts about prices associated with other websites than Amazon.
#10 Enlist Paribus
This service helps shoppers get money back from retailers who are continually displaying different prices, in exchange for a 25 percent cut of the refund. If the price of an item decreases after purchase, or a coupon code is available, Paribus negotiates a refund on behalf of the shopper (many retailers offer price adjustments within a specified period). Users give Paribus access to their email to send refund requests on their behalf, so it’s a good idea to have an email address exclusively for online shopping.
I hope these strategies will help you at least to circumvent the issues of online price discrimination even if not looking for answers for ending it.