LinkedIn on Saturday, December 27, 2025

“We, the people” – by which, in today’s America, I am referring principally to extremely large retailers – have the technology to enable instantaneous dynamic individual customer pricing.  Depending upon your gender, age, race and ethnicity, estimated income, what you had for breakfast last Thursday and other factors, major retailer AI computers will make sure you are spending the maximum you are willing to pay.  And you won’t have a clue it’s happening to you.  Congrats to all of us.  Who says American will never make any profound contribution to world culture?

Ever checkout and realize that the price you’re being charged is higher than the advertised price on the shelf when you put that item in your cart?  Accidents happen, of course, but sometimes the difference is happening on purpose.

In fact, dynamic pricing is primarily an online phenomenon because the online retailer controls shopper knowledge of both the “aisle (browser) price” and the price when you check out – and can make sure those prices are always the same for a specific customer.  And because, when you’re shopping online, there’s no risk of individual customers seeing prices other customers are being charged. 

True, smaller retailers that are unable to practice dynamic pricing may be at a competitive disadvantage relative to much larger online retailers.  But competitive advantage isn’t the biggest problem with dynamic pricing.

Studies show that retailers using this technology earn higher profits than they would without dynamic pricing.  Good for them, but are their customers being overcharged?  …To what extent, if any, is there “price gouging”?  The simple fact is that profits are higher as a result of dynamic pricing because average prices charged are higher.  It makes you wonder, doesn’t it?  Could the use of dynamic pricing technologies be a significant cause of the persistent inflation we’ve been experiencing?

At Target, for example, the first thing you show the scanner at the self-checkout register is your Target rewards bar code.  Doing that, before prices show up on the checkout screen, accesses all personal information Target has about you.  (If you’re shopping online, Target knows who you are as soon as you login.)  Are the prices you see at checkout always the same as the aisle prices on display when you picked up the item you’re buying?  …To what extent do you and other customers remember the aisle prices and notice that they are being up-charged by perhaps only a few pennies per item?  Millions and millions of transactions later, the total up-charge adds up.

In-store or online, we the real people need to know the frequency and dollar amounts of up-charging relative to down-charging discounting, like that ever happens.

Is there anything we can do about these up-charges?  Or is dynamic pricing just one more new technology the benefits of which accrue to the few on top of our economy courtesy of the rest of us?

-Les