BOSTON — When we shop in a store, we all see and pay the same price advertised on the shelf. But online, Boston 25 News found that’s not always the case – and researchers are working to uncover if your personal data is being used to change the price you pay.
The FTC recently launched an investigation into the prevalence and use of surveillance pricing, also known as personal pricing. A team at Boston’s Northeastern University is also investigating its use and impacts on consumers.
Surveillance pricing involves taking personal data – including potentially sensitive and protected demographic data like race, gender, or age – to determine the price you pay for items you buy online.
“There’s a whole ecosystem of companies that collect information about you,” says Dr. Alan Mislove, Associate Dean for Academic Affairs at Northeastern’s Khoury College of Computer Science.
That information is often sold to retailers to help them improve their marketing strategies, Mislove says. But surveillance pricing takes it a step further.
“Surveillance pricing is really about trying to figure out what’s unique about a particular consumer,” Mislove told Boston 25 News. “I’m trying to predict their willingness to pay for a given good or service, and then using that to set the price.”
While algorithms may compile data on your shopping and browsing habits to show you products based on your interests and location, researchers warn algorithms – and the retailers who use them – run the risk of discrimination if shoppers receive different prices based on their demographics.
Boston 25 teamed up with dozens of shoppers across eight cities in seven states to try and uncover examples of surveillance pricing. Participants in the two-week study varied by age, race, income level, and shopping habits. Members searched online for identical products from the same retailers on the same days at around the same times. They recorded their prices and whether they were logged into a store’s website or app.
In most instances, prices were the same. But not always.
In one case, a grill from Lowes listed at $299 for most of our shoppers displayed a price of $369 for one of four buyers in Orlando.
In another instance, a TV from Walmart displayed three prices: $877.95 for some, $898 for others, and $1,047 for one shopper in Atlanta.
But Misolve, who is leading Northeastern’s study, says it can be very hard to prove the price differences are a result of surveillance pricing and not another pricing strategy.
“Just because you and I receive a different price doesn’t necessarily mean it’s surveillance pricing,” Mislove told Boston 25 News. “It could be that somebody bought the last [item]… or it’s sold out. There are many potential explanations.”
Whatever the reason, shoppers find the lack of pricing transparency frustrating.
“Everybody should be equal, especially when it comes to the dollar,” shopper Larry Owens said.
“Everybody is greedy, and they want more money,” said shopper Chris Smith.
“They can charge me whatever price they want and I’m not going to know unless I do a lot of research,” said shopper Amy Booth.
“Consumers think this is very unfair,” Mislove said. “They feel like they’re getting ripped off.”
All retailers in Boston 25’s study were contacted for comment. Three responded.
Target and Walmart said they do not use surveillance pricing.
In an email, a spokesperson for Home Depot wrote:
“We go to great lengths to ensure consistent pricing for our customers throughout their entire experience with us across online and in our stores. Our customers may see price differences depending on what they have selected as their local store online, and those prices may vary based on geography. Pro Xtra members can qualify for discounts and other benefits.”
Some retailers, like Walmart, also allow third-party sellers to use their website. Those sellers can set their own price. Two sellers on the site may list the same product at different prices.
“This is getting exactly to the challenge we face in research,” Mislove says. “A lot of our research is how do we prove that it’s not something else, and it really has to do with… some attribute of you that the company has learned.”
Mislove suspects retailers may be using surveillance pricing indirectly through email discounts and coupons, what he says is known as “retargeting.”
“If I add something to my cart, the company knows I’m pretty interested,” he said. “They may run advertisements targeting me, specifically, to try to get me to come back and complete the purchase… It’s effectively surveillance pricing, but much harder to detect because it’s not like you just go to the website and see a different price.”
Boston 25’s Cayle Thompson received an email from Walmart a few days after the two-week study ended. The email was titled, “We noticed that something caught your eye.” It displayed the TV used in the study, but priced at $878 – a full $20 less than the one that was still sitting in Thompson’s cart inside the Walmart app at that same moment.
The FTC started looking into surveillance pricing last year before the start of the second Trump administration, but its status now isn’t clear. A spokesperson for the FTC said it had no comment when asked about its investigation.
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