Companies are increasingly using what they know about you to determine how little – or how much – you should pay for everything from flights to DVDs.
Between information stored on your computer and data tracked through online accounts, companies can learn quite a bit about who you are and what you buy. Many are using that information to change the prices they show you in a practice known as price discrimination.
Here are some ways online retailers can use your data to alter prices:
- Zip code: Looking through your IP address they can determine the average incomes where you live (based on your ZIP code).
- Internet history: Cookies saved to your browser show if you’ve visited a competitor or used a price-comparison website, and they need to price things more competitively.
- Past purchases: Purchases made through your online accounts show what you’ve bought in the past – and might buy again.
- Devices and browsers: How you access the Internet says a lot about you, and studies have connected these preferences to things like income as well.
A 2014 study by Northeastern University found nine out of 16 top retail and travel sites like Home Depot, Orbitz, Expedia and Travelocity used at least some of these methods. And given that was a few years ago, one can imagine the practice is likely even more common today.
While the idea of websites giving different prices to different people can seem creepy or upsetting to some, this price discrimination could actually work in your favor. Some of these websites offer special deals to convince users to buy more.
But if you want to find out if you’re a target of price discrimination, or even avoid it altogether, there are a few things you can do:
Detect different prices
Northeastern University, which released the study about online price discrimination, recently released an add-on for Google Chrome that actually detects different prices for sites including Google Flights, Amazon and Priceline, and they’re in the process of adding more.
A search for “diapers” while logged in to Amazon resulted in prices that appeared to be discounted from what would be presented to another user (see image).
Clear your cache / browse in “incognito” mode
By clearing your cache or erasing all cookies from a browser (usually found under “Settings”), you can eliminate much of the data a website can gather about you when you visit. Browsing in “incognito” or “private” mode also prevents your browser from sharing your information with websites.
Check prices on a mobile device
As stated above, different prices are sometimes given to users on mobile devices, whether they’re cell phones or tablets. Log on to the same site with a mobile device and do the same search – you may be surprised by the results.
Change your IP address
This is a bit more complicated to do, but if you can mask your IP address- or even change it to an area with different incomes than where you live – you may find different prices when you search online. Will they be lower? There’s no guarantee.