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The Internet The Almighty Buck Businesses

Online Shoppers Naive About Online Prices 513

Posted by Zonk from the world-is-out-to-get-you dept.
smooth wombat writes "Have you ever been shopping online and noticed the difference in prices for the same item at different stores? Do you realize that not only are the prices different from store to store but they could be different for you compared to someone else who shops at the same store? Nearly 2/3 of adult internet shoppers thought that practice was illegal according to a study (pdf format) conducted by the Annenberg Public Policy Center of the University of Pennsylvania. First-time buyers at a retailer could see higher prices than a firm's repeat customers, and retailers may not offer discounts to consumers who buy the same brands regularly without even looking at alternative products on the same site. From the article: 'The Annenberg study was based on results from a telephone survey from Feb. 8 to March 14 of 1,500 adults who said they had used the Internet within the past 30 days. The margin of sampling error was reported to be plus or minus 2.51 percentage points.'"
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Online Shoppers Naive About Online Prices More

Online Shoppers Naive About Online Prices

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  • How prevalent is this practice? It would be pretty silly to say I've never noticed it (it's hard for one person to check this by themselves), but I was certainly not aware that it happened.
    • I think it is fairly prevalent, which is why sites like http://www.bensbargains.net/ [bensbargains.net] exist. An example I found a couple of years ago : I ordered a flat panel from Dell. When I shopped on their "Home User" site, I got a price that was $300 more than if I put in some bogus corporation name and shopped the "Small Business" site. Guess which one I ended up using? To me, it is repugnant that I had to even go through all of those steps. Volume deals for corporate customers I can understand, but blatant price disc
      • When I shopped on their "Home User" site, I got a price that was $300 more than if I put in some bogus corporation name and shopped the "Small Business" site. Guess which one I ended up using? To me, it is repugnant that I had to even go through all of those steps. Volume deals for corporate customers I can understand, but blatant price discrepancies just because you browse a site differently than another single customer is bad business

        "just because you browse a site differently"="just because you lie to

        • Yes but he's ordering 1 flat panel monitor. Many companies order 1 of a item and get a discount because they are a company and the thing is that there should only BE one site. 1 for EVERYONE. This B2B and B2C crap is, well, crap. Almost every item a business could need could be needed by a single person. I can see it if it was liquor and the state law said you had to have a liquor license or something to buy it...I can see if you were trying to buy chemicals or refrigerant, but not for a flat panel mon
          • Companies in general are better customers, so it makes sense to court them. They tend to have in-house support so you have fewer clueless people calling vendor tech support. And while they may only be ordering one monitor now, they usually have a lot more to buy than the avearage home user and so getting and keeping their business is worth more.
      • Comment removed based on user account deletion

      • Price discrimination (Score:3, Insightful)

        by sjbe ( 173966 )
        Volume deals for corporate customers I can understand, but blatant price discrepancies just because you browse a site differently than another single customer is bad business. I don't know if I would consider it illegal, but it is definitely unethical.

        Why? I'm not trying to be trite but I see no ethical dilemma here. What you are talking about economists call price discrimination [wikipedia.org] and it is not only not illegal (in most cases) but I would argue it isn't unethical either. (with appropriate exceptions for
        • I agree, it's not illegal and I can't see anything unethical about it either. I don't think anyone would bitch if a site offered them a price 10% less than most people simply because they are a frequent customer. They only complain if the price is higher than what someone else paid.

          To me, this is simply an online form of negotiation or haggling. In many countries, there's simply no such thing as fixed prices. It's whatever you can negotiate. Online, if you can google up coupons or discount sites to fi

          • Not just online (Score:5, Insightful)

            by Ironsides ( 739422 ) on Thursday June 02, 2005 @12:02PM (#12705359) Homepage Journal
            There is this one small collectibles shop I go to frequently. On average I spend a couple hundred there a month. The owner decided to start giving me an extra 10% discount since I buy so much. Sounds good to me and I'm about to drop a few hundred there tomorow. Not sure how many others get the discount, but if someone gives you enough business it can make sense to give them a little extra to keep their business and show them you appreciate them.
        • But in reality most prices for goods and services are negotiable and we probably don't have the same williness to pay.

          When my sister was in college one of her professors had his students go into a local retail store and attempt to negotiate a price. It is amazing how often you can renegotiate a price at a store like Wal-Mart. Most people would never even try, but the students in this professor's class were often successful.

        • Re:Price discrimination (Score:5, Insightful)

          by NtroP ( 649992 ) on Thursday June 02, 2005 @11:32AM (#12705061)
          If I'm willing to pay more for something than you are, what is unethical about someone selling to me at a higher price?
          I agree. This doesn't exactly match what you are saying, but I recently purchased a non-restored, classic muscle car that I had my eye on for some time. I had a price in mind that I was willing to pay for it. When the owner finally relented, it turned out that they were willing to part with it for less than what I was willing to pay - so I bought it. I was happy with my purchase.

          Soon after that, I was talking to some acquaintances (who admittedly have more experience and knowledge about classic cars than I do) and was given the impression that I might not have gotten the "deal" I thought I had (based simply on their experience and a verbal description of the vehicle). At first I was dismayed. I felt that I'd been taken, but then I realized, "Hey, wait a minute, nothing has changed. I wanted the car. I was happy with what I paid for it. I'm enjoying the hell out of it. What's the problem."

          As it turned out, after having the vehicle actually inspected by an expert I discovered that it was in much better shape than it had a right to be (for being 35 years old) and that all the important VIN numbers matched and that there hadn't been any after-market body or engine modifications to speak of and almost no hidden rust or damage . It turned out that I actually had a better deal than I even thought from the beginning. But regardless I was happy with the purchase and it performed beyond my expectations and I got it for less than what I was willing to pay for it. Why should it upset me if someone else might have been able to get it for less. Good for them! Now this is a little different than buying a new commodity item online - it's a relatively rare and unique, used item - but as long as I got what I was expecting for a price I was happy with, that's what counts. What someone else "might" have gotten a similar (or the same) product for should in no way affect me.

          I'm selling my classic class-A motor home. If I sell it in the paper, I want $4,500 for it. I have a friend that expressed interest in it that I quoted $3,000 for it. My wife has a coworker that is in need of one for a very specific thing and is in bad financial straights, I told her I let it go to him for $2,000, no money down and take payments. Should my friend be upset? $4,500 is less than market value and I won't go much lower than that on the open market. If a friend of mine approaches me I'd sell it to them for $3,000 or so. If my neighbor's house burned down I'd give it to them for $1. No-one should feel gypped.

          The whole situation reminds me of a time when a coworker got a raise, but was reluctant to discuss it with me because they thought I'd be upset. I said that I was happy for them. They deserved it. They asked why I wasn't angry about it since I hadn't gotten one and I said "Did they take your raise out of my paycheck? Am I suddenly making less money now? Why shouldn't I be happy for you? Nothing has changed for me at all - besides, rich-boy, you buy lunch today"

        • Illegality and the Robinson-Patman Act (Score:4, Interesting)

          by Otto ( 17870 ) on Thursday June 02, 2005 @11:43AM (#12705193) Homepage Journal
          What you are talking about economists call price discrimination and it is not only not illegal (in most cases)

          I would argue that it's possible to interpret the Robinson-Patman Act in a way such that price discrimination like this *is* illegal, in the United States. It may not be prosecuted much, but the law seems pretty broad and could be interpreted to cover this sort of thing.
          • Hmm - my understanding was that the Robinson Patman act was designed to prevent predatory pricing. This being the issue with large oil companies that forced out smaller oil companies by artificially selling oil cheaper in one region while charging higher prices in areas where there was no competition. www.ftc.gov/speeches/other/patman.htm Culturally, Americans like the Fair Deal concept. Other cultures find the "Fair Deal" concept laughable. They see it as a problem that Americans don't value money enou
        • I'll be honest, I don't really care if an LCD monitor costs me an extra $100 if it does what I want and I can get it when I want it.

          That's totally different. I am also willing to pay an extra $100 to get a "better" monitor. But the post you replied to talks about paying an extra $100 to get the exact same monitor.

      • First, it is completely OK for individuals to order from the Dell Small Business site. You can just use your full name as the "company" name, instead of making up any bogus company names.

        I have ordered many times through the small business site. So did many people I know. I once asked the Dell sales rep assigned to the company I work with. The answer is exactly what I said above.

        The Home site and the Small Business site, as well as other ones, are ran by different business units, which are independent of
      • Well, I think the big thing here is that in some cultures this weird idea of "one price for everyone, I take it or leave it" and in others there is the haggling mindset - the truest free market. For instance, there is no law that says you have to agree on a price; you could probably try to go haggle with the wal-mart manager but he'll probably say "no, if you don't want to pay what's on the sticker, then I won't sell it to you" but you can probably go into a specialty shop and haggle a couple bucks off thin
    • Comment removed based on user account deletion
    • Daily.

      It's been going on for Decades. The internet has ony made it visiable to end consumers.

      Ask any retail/wholesale warehouse. Where I work we have 6 primary levels of pricing. The last two are never touched. they are cost plus 10% and cost plus 20% and are used as pricing markers. The others vary depending on product, with 10 different discount matrices dealing with a percentage off a predetermined price.

      Consumer who walks in and buys a once gets one price.

      Business who walks in and buys once a

    • Happens within the span of about five minutes. (Score:4, Interesting)

      by mosel-saar-ruwer ( 732341 ) on Thursday June 02, 2005 @10:47AM (#12704604)

      How prevalent is this practice?

      I've experienced price changes within the span of five minutes, or less. I'll be surfing around to sites, comparing prices, and I'll return to a site I've just visited, and they'll increase the price on me [I've never seen a price decrease].

      I think they program the software so that the more hits they get on a product page served to your [preset] "cookie", the more they edge the price up on you, figuring, I guess, that you're really interested in the product, and that maybe they can "scare" you into purchasing it [or maybe somehow bleed that extra $10 of profit out of you on account of your insatiable desire for the product]. And no, I don't think this is primarily a supply and demand thing - I think these price change engines are primarily driven by some [previously arcane] theory of marketing psychology. The airline/hotel reservation systems [Expedia, Travelocity, Orbitz] are particularly guilty of this [and, again, I do NOT believe that it is primarily attributable to a finite supply of airline tickets or a finite supply hotel rooms].

      And of course, you also have the phenomenon of e.g. different Yahoo stores [different URLs] that have identical ownership [i.e. identical "whois" lookups], and identical inventory [and, typically, identical SKUs], but which offer slightly different prices on the very same items. Or merchants whose "normal" price on an item differs from their "advertised" price at e.g. pricewatch.com.

      Generally speaking, these kinds of gimmicks really tick me off, and tend to push me towards a site's competitor [assuming they aren't playing the same damned game] - and it sure doesn't make a damned bit of difference to me whether I purchase that ticket from Expedia, Travelocity, or Orbitz.

    • Wal-Mart doesn't have the same price as their on-line store. Target doesn't even carry the same products. Two examples; Matrix Reloaded was 15.95 online (walmart.com) the day it went for sale, yet at the local Wal-Mart was selling copies for 21.98 - Target sells Divx certified DVD players online but doesn't list the Philips DVP642 (classic) where it can be bought at the local store.

      Your audience is different. I'd say instore shoppers are naive about instore products and prices. Because of the Internet you
  • "But for you, my friend - half price!"
    (Hides price tag)
  • What an awesome scheme. If the shopper doesn't demand a bargain, why offer one? The saavy shoppers find the good deals, and the unsaavy ones help the economy a bit more ;)
  • Get fleeced. Well, Doh!

    Let that be a lesson to all the brand junkies.

  • This is why you should use deal sites such as -

    Rage3d.com/deals
    Slickdeals.net
    Pricewatch.co m
    Pricegrabber.com
    Froogle.google.com

    They keep you informed about the latest and greatest deals as well as allowing you to comparison shop the item you are looking for.

    Also don't be afraid to look at popular sites like ebay.com, half.com and amazon.com. A lot of times you can find a private retailer through amazon that will sell you a used copy of the book / movie / cd / DVD that you are looking for at 50% or better
    • Also add:

      Bizrate.com
      Mysimon.com

      Also, always look through the clearance areas. The biggest secret is refurbished products. Most electronics/computer companies have refurbs. I bought my wife's Powerbook as a refurb, which was cheaper than the same machine new, from Apple, with the student discount. Refurb units usually have the same warranty as a regular new unit, but have been checked to verify they work before they are sent to the customer.
      • I've bought two monitors that were refurb a few years back - both died within 2 years (the first died in less than 6 months!)

        I'd rather avoid refurb, thanks. I'm glad it's working out for you, but I got burnt twice and I don't want to put 200$ down just for it to happen again.
  • is as old as time. why are people suprised? it amazes me the lack of education people have when it comes to worldly knowledge.

    the nice thing about the internet is it does not discriminate to whom it gives the discounts to, as long as you fit the "revisit" criteria
    • A good counterscheme then should be for people to publish methods of achieve these "revisit" criteria without actually being good customers.

      Oh but then I think online retailers would scream bloody murder.
    • is as old as time. why are people suprised? it amazes me the lack of education people have when it comes to worldly knowledge.

      Because the vast majority of North Americans are used to the mall-retail shopping model where there is a single posted price, and there is no haggling.

      Another store may have a different price, and corporate/bulk purchases may have another.

      They're simply just not exposed to the variable-by-customer pricing model.

  • Really? I don't believe it. (Score:3, Interesting)

    by ylikone ( 589264 ) on Thursday June 02, 2005 @10:19AM (#12704270) Homepage
    I have multiple computers in my home and use the primary one to make online purchases, yet I have never noticed a price discrepancy when browsing the same items at the same online shops using my other computers.

    Somebody please provide a sample site that does this.

  • I would argue most online shoppers don't know pricing period, I can't count how many eBay auctions I have seen where the items go for more then retail. Not to mention how many online stores are selling for more then retail.
    • I have to wholeheartedly agree with your comment about eBay. Just last week I was looking at an eyecup for a camera. The seller had the original box with the price sticker on it which said $13.00.

      The eyecup eventually went for $14 plus shipping.

      This wasn't the first time I had seen something with the original sticker on it go for more than what it originally cost.

      I would love to see how much debt these kind of people are in since they apparently don't care how much they pay for something.
      • Most of the time yes, this is boneheaded shopping. But don't forget that for a small percentage of the time, folks may be looking for a very specific discontinued item that is no longer available through retail outlets, even at the lower original price. In other cases, the item may just be rare and hard to find. That being said, I've never actually bought anything off Ebay myself.
        • This is the case. My example would be memory upgrades for the eMate 300 I just bought as well as the serial cable. I have seen prices on the cable as low as 8 bucks and as high as 15. The memory upgrade is priced around 100. We are talking about a 4 MB chip. I would pay around 80-100.
    • I know what you mean. The first time I used ebay was to buy a WinCE clamshell device. I also wanted to get the memory chip to upgrade it's install of Wince to 2.0 (It shipped with 1.0)

      So I found an auction on ebay. Several as a matter of fact, all from the same company. The chips were selling for $90 to $125 a pop. I was a bit put off by this price, and decided to click the "Buy this item direct from our web site" link in the middle of the ebay ad.

      This link was in large type, easily five times the s
  • Sounds like an extra feature, eh?

    "Price Customization! Just for you!"

    They ran this story on our local TV news last night. If I understood the reporter, it sounded like vendors were "customizing" the price based on all kinds of things, inlcuding whether or not you came to the site directly or had done a price search (aka Froogle) beforehand.

    There's always a point/counterpoint to these things: virus vs. antivirus, spyware vs. antispyware, etc.

    So it sounds like this is a ripe area for the next generation o
  • Antone Gonsalves from InternetWeek [internetweek.com] gives some advice to avoid this:

    Internet shoppers who want the best prices should delete cookies as often as possible. That's because the less online merchants know about you, the less likely they'll be able to figure out how much you're willing to pay.

    Anyway, I'm not against companies taking advantage of technology to boost revenues. Heck, it would be naive to expect businesses to do anything else. But I do have a problem with failing to disclose the information you

  • Bottom feeders (Score:5, Insightful)

    by Skater ( 41976 ) on Thursday June 02, 2005 @10:25AM (#12704327) Homepage Journal

    FTA: They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty.

    The arrogance it takes for an industry to come up with this phrase is just amazing. I think I'm generally more pro-business than most Slashdot readers, and I don't even fall into that category - I'll go with a brand/merchant I've used before even if they are priced a bit higher, if I feel I got good service, because I'd rather deal with a known quantity. But the "bottom feeders" term makes me want to slap some people around.

    Perhaps what's really annoying me is that companies don't want to compete and so are doing everything they can to attract their "ideal" customer while saying "screw you" to the other guys. As someone who has been ignored at car dealers on several occasions (usually because of my apparent age or because of the borrowed car I was driving that day), I find the practice of turning customers away arrogant and annoying. Changing prices only makes it worse.

    • I know someone who walked into a car dealership and two of the salesmen were arguing over who had to go help him, as they didn't think he would actually buy anything.

      He left with a $40,000 pickup truck, having bought it from neither of those two.

      • Re:Bottom feeders (Score:2, Interesting)

        by Fishstick ( 150821 )
        I had a somewhat similar experience.

        Right after I got out of school and got a job I was in the market for a new car and had narrowed down my price range and picked out 2-3 different models I was interested in. They were in the $30-35k range.

        I went out on a Saturday in my jeans and t-shirt in the beater I had been driving through school (a ex-state-cop dodge diplomat). I got luke-warm to cool reception at the first couple dealerships (one wouldn't even let me test drive, wouldn't talk about price, only p

    • Re:Bottom feeders (Score:2, Insightful)

      by Rude Turnip ( 49495 )
      "As someone who has been ignored at car dealers on several occasions (usually because of my apparent age or because of the borrowed car I was driving that day), I find the practice of turning customers away arrogant and annoying."

      That reminds me of a couple stories I've heard.

      My grandmother was at the bank and saw and old guy in scruffy clothing walk in. He filled out a withdrawal slip to make a withdrawal. The teller was trying to ignore him and was rather rude. He then went to get another withdrawal

      • Re:Bottom feeders (Score:2, Interesting)

        by archen ( 447353 )
        A car nut who owned his own tractor factory took his car back to the Ferrari factory when his clutch failed. Enzo Ferrari snubs the man because of his affiliation with tractors and "not understanding such a refined vehicle". The (rather pissed off man) fixes the clutch himself. Ferruccio Lamborghini later decides to enter the exotic car business himself, in competition with Ferrari.
      • More recently, a co-worker of mine was sitting in a large, empty board room at a high-powered New York law firm waiting for a meeting to begin. Another old guy in a scruffy suit (who could have been a security guard) walks in and they start a friendly conversation. The meeting starts to get together and its turns out this old guy was to be our client.

        Reminds me of a story I heard from my grandad.

        As I remember the story, there was this guy in Liverpool in the fifties and sixties who used to run a buildi

    • If you think that is bad you should listen to the credit card industry that punishes people who pay their balances off in full every month.
      • How do they do that? As far as I can see they don't charge me extra for it. They make money on each transaction, and I use my credit card instead of cash or check. The only trick is I pay it off every month. Yes, stores who take credit cards tend to have somewhat higher prices as a result, but I don't know of many stores even in NYC (which used to be "cash only, no taxes") that don't take them anymore. I think the drop in muggings is largely due to the fact that there's no excuse for carrying more than $10
        • Credit Card companies make most of their money off of interest charges and fees (such as annual fees for air mile cards). If you pay off your balance every month like a responsible person they consider you a "freeloader".

          "Freeloaders" Get Higher Fees [eagletribune.com]

          GE Punishes "Freeloaders" [cardweb.com]

          BJs Drops Customers [cardweb.com]

        • How do they do that? As far as I can see they don't charge me extra for it.

          As far as you see. Those little slips of paper that come with your bill every couple months, the ones where the company unilaterally changes your credit card agreement. They contain details of what interest you will pay on outstanding balances, as well as what grace period you have before interest starts accruing, what fees you'll pay for a late payment or returned check, and what annual fees you'll pay for having the card.

          Yo

    • This reminds me of an interesting story my father told me, that supposedly happened here i Karlstad, Sweden, in the early 20th century.

      There was a rich farmer who lived outside the city (supposedly in Ekshärad) who decided to go into the city to do some shopping. Even though he was wealthy, you couldn't tell by the way he dressed. So, he walks into an expensive furniture store, and finds a large mirror that he's interested in buying. He asks the clerk how much the mirror costs, but the clerk says some
      • I was talking to a banker about farmers once (I don't know how it came up), but farmers will routinely come in move $100,000 or more from one account to another or one bank to another, depending on the season or what equipment they're buying. They obviously aren't getting rich at farming, but they do have a lot of money tied up in assets and can have large sums of cash on hand at certain times of the year. So never underestimate people! :-)

        Reminds me of some wise words I learned in grade school -- never

    • Comment removed based on user account deletion
    • The arrogance it takes for an industry to come up with this phrase is just amazing.

      I hate to break this to you, but every "industry" comes up with these types of phrases. Ever dealt with a "luser" while doing tech support?

      Just because there is a term out there used within the industry doesn't mean amazon.com employees stand around and refer to the "bottom feeders" on the site that day.

      But so what if they do? As long as they treat me well and provide the products or services I want, I couldn't care less

  • Yep (Score:4, Informative)

    by beforewisdom ( 729725 ) on Thursday June 02, 2005 @10:25AM (#12704331)
    There was a story a few years ago about Amazon charging people different prices on the same items based on the customer's geographical location.

    You can use this site to compare prices on books, cds, dvds ..etc across site, with the cheapest price on top. The information includes shipping costs:

    http://www.bestbookbuys.com/ [bestbookbuys.com]

    You can also blow your cookies and see what the prices are before you sign into your account.

  • I really fail to see what the problem is (Score:4, Insightful)

    by goldcd ( 587052 ) * on Thursday June 02, 2005 @10:27AM (#12704348) Homepage
    If you don't like the price that something's being offered at, then you just don't have to buy it.
    There's no legal obligation that car dealers have to give everybody the same lowest price that they ever sold a car for.
    I'm not sure about the idea mentioned in the article that regular customers will get lower prices though - surely it should work the other way around. You get the customers landed with cheap prices and as they keep coming back you gradually tap them up until their visits start to drop off and then you start to lower them back down.
    • Unless, of course, they discriminate based on race, religion, sex, or physical disability. Or at least a landlord can't do that. I can't imagine it being legal to say "well, this usually costs 5$, but since you're black, it's $50000".
    • The problem really is only that people seem to be unaware that it is going on. I can understand why; people are so used to seeing a non-negotiable sticker price on consumer goods. I agree with an earlier poster who called for full disclosure from companies with regards to their data collection policies. Even the most rabid free marketeers understand that it can only work if customers are well informed.
    • I believe it does work the other way around - that was the claim when Amazon was "caught" doing this. I think the problem was that people are used to getting deals - paying less than the usual price. No one makes a big deal when people with those grocery store cards save money on a can of soup, because we see them as saving money.

      So I think it all has to do with the baseline price, or what most people pay. Saving money is good (even if you aren't the one saving), but if most people are paying $20 for s

    • If you don't like the price that something's being offered at, then you just don't have to buy it. There's no legal obligation that car dealers have to give everybody the same lowest price that they ever sold a car for. I'm not sure about the idea mentioned in the article that regular customers will get lower prices though - surely it should work the other way around. You get the customers landed with cheap prices and as they keep coming back you gradually tap them up until their visits start to drop off a
  • You click on the 'buy' button with your eyes closed == Angel
    You shop around, haggle, diligently apply for all possible rebates, never settle for anything else than the minimum price == Demon

    Guess which of the two businesses prefer?

  • ....are stupid. period.

  • Customer: "How much is it."
    Vendor: "How much you got?"

    It's just a different store front, I don't know why people are so surprised.

    For many, many years, particularly in areas of the service industry where prices may be negotiable, people have been quoted a price based on something as simple as their clothes or their car. If they look like they'd be willing to pay more, is it wrong to ask for more?

  • You mean they are tracking my buying history!!! They are giving me a different price than someone else!!! Why that is shocking and outrageous!!! How dare they use age old methods of prefered customer discounts and high-tech haggling. I thought the web was supposed to be the final frontier where all were equal and eveyone got the best price!!! *chuckles ironically*
  • First-time buyers at a retailer could see higher prices than a firm's repeat customers

    That seems like an odd strategy to me. A potential first-time buyer may simply be lost to another retailer with a lower starting price.

  • Ever go to a frickin' grocery store? (Score:3, Informative)

    by bigtallmofo ( 695287 ) on Thursday June 02, 2005 @10:32AM (#12704435)
    I know the Slashdot crowd has a reputation of living in their parents' basement, but come on. Have any of you expressing surprise and outrage ever shopped in a grocery store? Let's see...

    Almost every item is listed as a "regular price" and a "club price". If I possess one of their club cards (i.e. approximation of a frequent shopper), I pay the club price. If I don't possess such a card, I pay far more.

    Oh, and then there's the whole coupon thing. Based on my shopping habits, sometimes a coupon prints out, making me further pay less than another consumer for the same item in the same store. Sometimes they even mail me a coupon to encourage me to buy a particular thing!

    You can express your opinion on the fairness of this, but expressing surprise or doubt that this occurs only shows you haven't been paying attention in the online OR the offline world.

    • It changes heavily by state. Most grocery shops in California seem to do what you describe. You just forgot to say you don't really need to give a name or address to sign up for the club card, so you could get a new card every day if you want to. On the other hand, I've yet to see a grocery chain in Missouri with a 'club price'.

    • Have any of you expressing surprise and outrage ever shopped in a grocery store? Let's see...
      There used to be a grocery store around here that did exactly that. They stopped doing it about a year or two ago probbably because people didn't like it. I think it was more of a hassle to get the stupid card than it was anyone implying the discount card was unfair.

      There's also a BIG difference between grocery loyalty cards and online price "customization". The grocery stores tell you upfront how to get the

  • what? (Score:3, Funny)

    by utexaspunk ( 527541 ) on Thursday June 02, 2005 @10:34AM (#12704459)
    you mean there are naive people on the internet?

  • Reserve price (Score:3, Informative)

    by Roached ( 84015 ) on Thursday June 02, 2005 @10:38AM (#12704496)
    In economic terms, this is called the reserve price, or the price someone is not willing to exceed in order to purchase something. In a perfect economy everyone has their own unique reserve price that they feel is fair for what they are buying. It's been accepted in the airline industry for years, but I guess when it's applied to other items people feel like they were ripped off if they find that they could have gotten it cheaper.
  • Just because it happens on the 'net doesn't mean it's a totally new practise. Hell, brick and mortar retailers have been doing this for years. Normal customers get the retail price, but when you're a preferred customer, or on some marketing scheme you get discounts.
    Doesn't bother me at all.

    The shopping world has always been divided between suckers and price hunters....Move along, nothing to see here.

  • plus or minus 2.51 percentage points

    That's odd -- my screen reads "5.21 percentage points."
  • ... is here

    One of the ultimate grails of maximizing profits is to segment the market to such a point that sellers get out of each individual buyer as much as he or she is willing to pay for any item.

    In the case of online shops, technology allows sellers to get a good approach to maximizing acceptable price per individual buyer.

    Smart buyers can also use technology to maximize the ammount of satisfaction they get per-buck spent - try comparisson sites, online user reviews and such.

    Dumb buyers will continu

  • Victoria Secrets did this (Score:3, Interesting)

    by smooth wombat ( 796938 ) on Thursday June 02, 2005 @10:42AM (#12704541) Journal
    Replying to my own posting (yayyyy!!!), I remember several years ago when Victoria Secrets was found to be doing the same thing with their catalog sales.

    They would send out the same catalog to the same address but would have different prices for the same items depending on how much you had previously bought or were male or female. People began to figure this out and complained.

    Link 1 [courttv.com] about this issue and another link [vanderbilt.edu] from a 1998 Forbes article on the issue of price discrimination.

    For a more in-depth look at price discrimination, see this link [vjolt.net] which is a muli-page essay from the Virginia Journal of Law and Technology from 2001.

  • Customers are naive about prices period. Discriminatory pricing (what this article talks about) is prevalent in retail: coupons, special codes, AAA rates, frequent flyer miles, all are ways of charging some people less for the same product or service that others are paying more for. In the end it's all psychology: if Amazon or Dell gives customer A an "instant rebate" on the TV she just purchased, that's perceived as being a good retailer, but if they charge customer B more than customer A w/o any coupons

  • People are idiots (Score:3, Interesting)

    by Nytewynd ( 829901 ) on Thursday June 02, 2005 @10:55AM (#12704679)
    From TFA:
    More than two-thirds of people surveyed also said they believed online travel sites are required by law to offer the lowest airline prices possible.
    WTF? Why would online sites be required to offer lower prices than a normal travel agency? Why couldn't they make more profit if their demand was higher? Required by law to offer the lowest prices?

    The bottom line is that any service can charge basically whatever they think someone will pay. As long as there aren't fradulent claims (such as a "guarantee" that their price is the lowest", they can charge double the value if they think it will sell.

    Normal stores off incentives to returning customers. I get money back at Macy's when I shop there. That is the same as Amazon offering me a better price on a DVD because I am a frequent customer. People get all riled up over things on the Internet that happen every day anyway. Same thing with credit cards online. People are terrified of typing in their credit card number over HTTPS, but will hand their credit card to a random 16 year old kid standing behind a counter.
    • actually, that phrase "guarenteed lowest price" has so many loopholes and caveats that you will see more than one competitor use it for the same goods at different price, without any possibility of being accused of fraud. Or the phrase "largest online dealer", which could actually mean several things. Even "your money back if not fully satisfied" might not mean what you think it does (read that fine print!)
  • is price fixing, would you rather have that? Not me, I'd rather hunt around for a good deal for major purchases. It's worth it, you can get 20%+ more gear that way!
  • Some loyal customers get discounts, but consider this for a moment.

    You're going to buy cable television. They offer it to you for $29.95 per month or whatever, then they spike the price. This would be the exact opposite of the whole loyal customer thing, right?
  • While I understand why a seller wants to offer the same thing at different prices for different customers (although I don't think it is ethical), it eludes me why they would want to present different delivery dates to different customers.

    A while ago I was looking for a certain book. I came across a link to the same book sold at http://www.amazon.de/ [amazon.de] (the German Amazon shop). I followed the link twice, but with two different browsers. I ended up looking at the same page with two different browsers, each wit
  • Nearly 2/3 of adult internet shoppers thought that practice was illegal...

    This just exposes the mentality of the average internet user: if something is bad for them, they expect it to be illegal. They expect the government to take full responsibility for their well-being, and this is why government (the US government, at least) has gotten so big.

    I was reading a front-page article in my city's newspaper the other day. A "mentally disabled" woman walked into a retention pond and drowned. The response

  • Fixed price retail was invented because retailers did not have the skilled staff or the IT to offer dynamic/negotiated pricing. It is really only a temporary phase in the evolution of retailing.

    Customers may hate paying different prices, but it is the only way to both maximize the number of customers that can buy a given product and fairly allocate profit (difference between the value received and price paid) across both the sellers and the buyers. In a fixed-price system some extremely wealthy buyers
  • ...you find that it's more about customers' knowledge than about actual industry practices.

    Targetted pricing is hard to do for any item that can be purchased at multiple retailers. Dell can do it since they're the only ones who sell Dell products (no way to comparison shop). Likewise, retailers with exclusive product lines (for example, clothes) can do this as well.

    What's more interesting isn't the pricing ignorance but just general privacy ignorance. You'll need to go to the end of the study for the su

  • Ever buy airline tickets online? (Score:3, Interesting)

    by pclminion ( 145572 ) on Thursday June 02, 2005 @11:44AM (#12705203)
    A few months back my mother was looking to purchase airline tickets. I don't remember which travel site she was using, but as she examined different fares, the rates kept changing (mostly increasing) and she had no idea why. Being a cynic, I told her to delete all her cookies. Unbelievably, this caused the fares to reset back to "sane" prices.

    If you buy travel tickets online, be aware that the prices will basically go up as long as you "dilly dally" while booking a flight. These sites use cookies to track individual users and punish those users with higher fares in certain circumstances. To get the prices back down to normal, clear your cookies.

  • &^%$#@! marketing droids.. (Score:4, Insightful)

    by EvilStein ( 414640 ) <.ten.pbp. .ta. .maps.> on Thursday June 02, 2005 @11:49AM (#12705255)
    "They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty."

    No, lawyers and marketing dicks are the "bottom feeders." the rest of us are just trying to avoid getting screwed by both parties.

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