Technology allows retailers to adjust prices depending on who’s buying and when. Use our tips to avoid paying more.

Have you ever checked prices online then viewed the same item later with a higher price? You may have experienced dynamic pricing. Here’s how it works and how you can avoid paying too much.

Dynamic pricing happens online and in stores

Dynamic pricing means prices change in response to things like demand, timing, location and competitor pricing. While surges in demand drive prices up, lulls in demand—such as during off-peak hours—can lower prices.

You’ll often see the effects of demand and timing on airline pricing around holidays and popular travel times like spring break. Higher demand leads to higher prices.

Here’s how timing can affect airfare: when an airline sees someone is booking a ticket at the last minute, they may charge more because they assume the passenger really wants that flight.

Dynamic pricing isn’t limited to airlines. Concert and sporting event ticket outlets, ridesharing apps, national retailers and many other sellers employ the practice.

Dynamic pricing isn’t limited to online sellers. Have you ever seen electronic shelf labels (ESLs) in stores? These digital price labels are gaining in popularity, allowing retailers to efficiently change prices. Concern that the devices may be used to implement surge pricing in grocery stores has caught the attention of lawmakers. To date, most grocery retailers say they haven’t used ESLs to increase prices for products during peak demand periods.

Sellers who monitor competitors may also change prices based on their rival’s price points. Sophisticated tracking systems can result in instant price adjustments.

Surveillance pricing is next-level dynamic pricing

Surveillance pricing is a more sophisticated pricing method where different people get different prices. Companies tweak pricing on an array of customer data and behavior. For example, conducting your search on a pricey Mac could result in a higher price quote than using a budget-friendly Chromebook.

The FTC calls surveillance pricing “a shadowy ecosystem” and to many consumers it feels like spying.

How to avoid dynamic pricing

Use these tips to sidestep dynamic pricing and save money:

• Restrict seller’s knowledge of your search behavior by clearing tracking cookies from the browser and turning on incognito/private mode.
• If you have access to multiple devices, like a phone and laptop, check prices from each. Alternatively, if you suspect dynamic pricing is in effect, ask a friend to check from their device.
• Use two browsers—one for shopping, one for buying. Say you use Google Chrome and Firefox; this gives you an advantage because sellers can’t track your activity across browsers.
• Check for location-related pricing by entering a ZIP code associated with a lower income level. If you see a lower price, clear the cookies from your browser and start the order again with the lower-price ZIP code. Verify pricing and your shipping address before completing the order.
• For items you don’t need right away, sometimes leaving an item in a retailer’s online cart for a day or more will result in a lower price offer.
• Apps like CamelCamelCamel, Honey by PayPal and others track prices, alert users of price drops and provide promo codes for discounts. Keep in mind that the tradeoff for saving through third-party apps is giving up data about your shopping habits.

 

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