Ever see a price for an item online, then look again and see a different price, and think you were going crazy? Probably not. You were probably encountering some form of dynamic pricing, which retailers have quietly dabbled in for many years.
Quietly, because every time consumers find out about it, there’s an uproar and they have to back off — as Target did this week, when Minnesota TV station KARE 11 (KARE-TV) exposed the store for charging very different prices on its app and in its physical stores.
A shopper who claimed to have paid $99 for a razor in-store, then spotted the same thing online for $69, had tipped them off.
The stations reproduced this pattern, with some striking results:
“For instance, Target’s app price for a particular Samsung 55-inch Smart TV was $499.99, but when we pulled into the parking lot of the Minnetonka store, that price suddenly increased to $599.99 on the app,” the station said. (Give ’em a click, read the whole report.)
KARE shopped for more items, and found an even more intriguing pattern: Basically, the closer shoppers were to the store, the more the item cost. If you are near the store, you don’t need a price enticement, the logic goes.
It also means Target is following you around, virtually, and knows where you are. And it’s looking over your shoulder to decide what price you deserve on an item. Spooky.
Target has changed its policies, according to KARE, in response to the story. I reached out to Target to see if the store wanted to offer additional explanation.
Target sent me a full statement, included at the bottom of this story. It reads, in part, “We’ve made a number of changes within our app to make it easier to understand pricing and our price match policy.” In essence, the firm has added language to its app that makes clear a price is valid in a store or online — see the screenshot below, provided by Target.
I saw something vaguely similar recently when I priced rental cars for a trip to Seattle. When I was logged in using my “discount code” and membership, I got higher prices than when I shopped as an anonymous user.
There’s nothing illegal about dynamic pricing, probably, even though it might seem unsavory or downright deceptive. It’s definitely a Gotcha. Why? Because the rules of this game are not transparent to you. And it takes advantage of people who might be too busy or distracted to play the “open another browser on another computer just to check” game when they are buying things.
But I’m here to tell you: This is the only way to buy things in the 21st century. Shopping around used to mean driving around and getting different prices from different stores. Today, it means clicking around to make sure you aren’t being followed when you buy things. Every. Single. Time.
Never make a hotel reservation without shopping both at an aggregator like Expedia and direct from the hotel. If you have time, call the hotel, too, and ask about the online price.
When you are in a store, always pull out your smartphone and do a quick price comparison — not just at THAT retailer, but at Amazon, and at other shops. And now you know, it’s best to price the item before you get to the store, just in case you are being followed.
Christopher Elliott, travel deal expert at Elliott.org — a site you should be reading — makes the point that software can help keep you from being followed by companies and dynamic pricing.
“You definitely have to log in and out and search for prices,” Elliott says. “Also, consider using your browser’s incognito mode. Companies are trying to track you and may change prices based on who you are, or who they think you are.”
You don’t always have to buy where the price is lowest; in fact, I’m against chasing every last dollar as a shopper. It’s OK to pay a little more if you want to support local businesses, and, often, people waste money and gas trying to save every last penny. That’s not the point here.
You just want to make sure you aren’t getting ripped off. It’s a pain, I know. Sorry. That’s Gotchaland. And until some regulator forbids the practice, you have to live with it.
Statement from Target
Image provided by Target. Note the phrases near the price indicating where it’s valid — in a store, or online.
“We appreciate the feedback we recently received on our approach to pricing within the Target app.
“The app is designed to help guests plan, shop and save whether they are shopping in store or on the go. We are constantly making updates and enhancements to offer the best experience for guests shopping at Target.
“We’ve made a number of changes within our app to make it easier to understand pricing and our price match policy. Each product will now include a tag that indicates if the price is valid in store or at Target.com. In addition, every page that features a product and price will also directly link to our price match policy.
“We’re committed to providing value to our guests and that includes being priced competitively online and in our stores, and as a result, pricing and promotions may vary. Target’s price match policy allows guests to match the price of any item they see at Target or from a competitor, assuring they can always get the lowest price on any item.”
More from Bob Sullivan:
- “Online lovers have lost a billion to scammers; don’t be fooled! (And hello again, old friend, CNBC!)“
- “When consumers get hacked, what’s the harm? Judge tells Equifax he wants to find out, OK’s lawsuit“
- “John Bogle, Wall Street hero, showed us how fees could eat 80% of our retirement funds“
Have you ever noticed dynamic pricing affecting your purchases? Tell us about your experience below or on the Money Talks News Facebook page.