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Online price discrimination exists — and it can be beaten

If you think you can find the lowest prices by shopping online, think again.

Tips on how to beat online retailers who charge people different prices

A new study out of Northeastern University has confirmed that major online retailers may be charging customers different prices and products based on their online profiles. (Associated Press)

If you think you can find the lowest prices by shopping online, think again.

Researchers at Northeastern University in Boston have confirmed what many online shoppers have long suspected: major online retailers are charging customers different prices on products based on their online profiles.

The study used the accounts and cookies of 300 real-world users to detect price steering and discrimination on 16 e-commerce sites. It found evidence that nine of the sites were using some form of personalized recommendation to boost sales.

They know probably more about you than you know about yourself.— Carmi Levy, tech analyst

Carmi Levy, a technology analyst and writer with Voices.com, says price steering and discrimination have long existed, but online data is allowing retailers to do it more effectively than ever before.

"When you walk into a car dealership, no technology at all, they're sizing you up," Levy told The Early Edition's Rick Cluff.

"They're looking out the window to try to see what kind of car you drove in on, they're looking at what you're wearing, what you look like, how much makeup you got on, to try to size you up, to determine how deep are your pockets and should they negotiate you up or negotiate you down.

"And so really, all we're doing is we're taking what's been going on for decades and adding a layer of technology to it which is a lot more sophisticated."

They know you well

Even though online retailers can't see potential customers physically, they can almost see inside their heads, thanks to cookies — a piece of code that most websites can install on someone's computer or mobile device — which can pick up information like the type of device you're using, the type of websites you're browsing, and what you might have bought.

"It's a lot more intense of a vision than simply what you're wearing when you walk into a car dealership," said Levy.

"They know probably more about you than you know about yourself."

Sound creepy? Here are some steps Levy says you can take to shift the balance of power back to the consumer.

1. Turn on private or incognito browsing

"Pretty much every browser — Google Chrome, Safari, Internet Explorer, Firefox — they all support it," said Levy.  

"What that does is it minimizes or limit the amount of data that you're sharing with retail website. If they don't have insight into you, then they can't play this game."

2. Adjust your cookie settings

By deleting or adjusting your cookie setting so that they're not supported, you take away online retailers' data advantage.

"In other words, my computer, my device will not allow a website to drop a cookie onto my computer," Levy said.

3. Play the waiting game

If you're interested in buying an item, put it in your shopping cart, but don't check out, said Levy.

"I'll bail, I'll abandon, and inevitably, a day or two later, I get an email for exactly that item with a 20 per cent coupon attached to it, because, hey, they want me back, they really want to make the sale."

To hear the full interview with Carmi Levy, listen to the audio labelled: New study shows major online retailers may be charging customers different price

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