Some Online Companies Guilty of Price Discrimination

When people search for products or services online, most of the time they feel confident that their search results have given them the best possible prices. However, a new study conducted by researchers at Northeastern University in Boston has shown that certain e-commerce sites engage in an unsavory practice known as price discrimination. What this means is that different visitors to the website may search for the same product, but be shown different results or different prices than others. This practice is also sometimes called price steering, meaning people are intentionally steered toward the higher price of the item.

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How Does Price Discrimination Happen?

When using the Internet, it is almost impossible for the average consumer to recognize if the search results they have been shown have been altered in any way. Some may wonder how this type of thing can even occur when using online sites that are supposed to be secure. The way companies go about price steering is by using information from your computer’s browsing history or by basing it off the type of smartphone you use. Although researchers did not quite understand exactly how this happens, they do know that information from “cookies” stored on computers and particular patterns of browsing history seemed to result in certain people being shown higher prices in some search results.

What Type of Sites Does Price Discrimination Typically Occur On?

Hotel accommodations and airfare are some of the most common things people buy online. Many well known travel companies such as Expedia and Travelocity have been found to use price discrimination, either for higher or lower prices for certain customer searches. Based on results derived from browsing history, Expedia has sometimes been known to display higher prices in search results, while Travelocity seems to offer better deals to those customers who conduct their online searches on tablets or smartphones. Neither of these top travel companies would comment on these findings. Travel company Orbitz actually acknowledged formerly charging Mac users higher prices for hotel rooms, but stated they no longer use this practice which they referred to as an “experiment”.

Other popular retailers such as Home Depot seemed to be showing higher prices for those who searched with mobile devices. A spokesperson for the company has since stated he feels the findings of the study are misleading to consumers. Office supply store Staples was also found to display search results with various prices based upon the location of the customer.

How to Guarantee The Lowest Prices When Shopping Online

Because every website incorporates different methods for displaying consumer search results, there is no certain way to be able to ensure that you are truly getting the best possible deal online. However, the researchers at Northeastern suggest searching for a product in more than one way, by using a desktop browser, mobile device, or by using a private browser to conduct your online searches.

In order to avoid becoming a victim of price discrimination or price steering, especially during the holiday season, try to incorporate the various ways of searching into your online shopping. You may even want to visit the store in person or check weekly promotional ads in the newspaper and mail just to make certain you really are getting the best deal and the lowest prices offered.

[Image credit: faizaljey, flickr]

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