Slashdot Mirror
Online Shoppers Naive About Online Prices
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.'"
Indeed. If find this particularly disturbing.
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.
NEWS FLASH!
Companies like making as much profit as possible! Film at 11. Also in the news... 2/3 of people are apparently very naive and stupid.
Somebody please provide a sample site that does this.
Meh.
I think it is fairly prevalent, which is why sites like http://www.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 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.
:^)
Then again, so is lying to get a better deal on computer hardware.
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 about this issue and another link from a 1998 Forbes article on the issue of price discrimination.
For a more in-depth look at price discrimination, see this link which is a muli-page essay from the Virginia Journal of Law and Technology from 2001.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
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.
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.
/. ++
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 size of the surrounding text, red and blinking. Kinda hard to miss.
They were selling it for $25 from their web site.
I can i\only image the laugh they were getting form the ebay auctions. They were doing everything reasonable to make it easy for people to get the lowest price they had to offer, and yet people were paying five times that because they couldn't be bothered to click a link in the middle of the damn ad.
"Live Free or Die." Don't like it? Then keep out of the USA
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 payments and asked me how much I expected to put down in addition to my worthless trade -- I didn't tell them that I already had financing).
I pretty much walked out of each of those without ever talking price. The last place I went that day, the guy was really decent, chatted me up about where I went to school (only one to notice the boilermakers sticker on the dodge) and generally did not seem to judge me based on my appearance. I talked price and financing terms with him but did not buy that day.
I went back a couple nights later, having gotten my check from the credit union for the amount he was talking, and made the deal. I drove home that night in my new car and stopped at one of the dealers that had been particularly crappy to me.
I got out, still wearing the work clothes (dress shirt, slacks and tie) from the day and the same sales jerk from before came walking out with a big smile asked if he could help me.
"You don't remember me, do you?"
"Um... Oh sure, you were here looking the other day. Would you like to take a test drive tonight?"
"No thanks, already did." and turned my back and walked back to my new car. Should have seen the face on this ass-clown as I got in and drove off.
There is much cruelty in the universe, John.
Yeah, we seem to have the tour map.
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.
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.
- Give a man a fire and he's warm for a day, but set him on fire and he's warm for the rest of his life.
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.