Image is from a product page on Amazon.com.

Saturday, September 19, 2026

The terminology, “surveillance pricing,” makes it sound as if someone, the seller, is spying on you.  It’s an assumption that many people are making as if that’s what’s actually happening.  I don’t think so, by which I mean to say that I don’t think their concerns are warranted. Here’s why…

When I was in my senior year of high school and still had a metabolism, my loving mother once caught me eating a Chuckle or two that a friend had offered me.  She assumed that I actually liked Chuckles which I didn’t then and still don’t.  As a result of this observation my mother made, every single CARE package that she sent me while I was in college included, you guessed it, a pack of Chuckles.  Or two.  That I never ate.  Why didn’t I ask her to stop?  Maybe more of her delicious homemade cookies and brownies, fewer Chuckles?  Because I cared a great deal for my mother and didn’t want to make her feel bad.  Yes, I know how that sounds, but that was college-student version of me decades ago.  I told her eventually, after I graduated, to which she responded, “And so you let me buy all those Chuckles for the past four years?!  Why didn’t you just say so?”  “Because,” I thought to myself, “that’s what Chuckleheads like me do?”  Lesson learned.

So, what’s my point?  My point is that it is human nature to discern what people you care about want and give it to them.  My mother’s motive was that she wanted to make me happy. The retailer, on the other hand, wants to make a sale that maximizes its revenues and profits.  My argument is that making that sale is the commercial version of the love my mother was sending me.  Not exactly, but sort of.

The problem people are having today is about technology.  My mother’s sources of information were very limited.  Today’s retailers – armed as they are with AI-supported computerized tools – are able to gather and analyze much, much more information that they can use to differentiate between individual consumers.  Round numbers, 20% of retail business in the United States is done online.  That’s a whole lot of business, but only 20% of the total.  The problem – if it really is a problem – is that shopping online prevents customers from seeing prices that everyone has to pay and from being offered sales that everyone enjoys.  It’s this 20% of shopping where surveillance pricing may be giving the retailer an advantage.  Mind you, there’s nothing mandatory about shopping online.  It’s just very convenient and often generally less expensive.  Maybe surveillance pricing is just part of the price you pay for all the time and money you save?  Along with other costs such as the inability to touch a product and try on clothes before you buy them.

Is it that these high tech marketing tools for online retailers – large and small – are collecting too much information about your behavior?  And that these online retailers are able to offer you one thing or one price, better or worse, higher or lower than they’re offering other customers?  Perhaps depriving you of specials available to other, less financially able consumers?  Specials that you know nothing about?

The assumption some make is that surveillance pricing isn’t fair.  That online consumers aren’t being offered a fair price.  In fact, it’s arguable that consumers walking into a bricks and mortar store aren’t being offered a fair price either.  Their being offered something more like an average price that everyone pays.  Sure, surveillance pricing for online purchases might be higher for some of us than online average pricing, but average online pricing for lower income customers will be higher than the surveillance pricing they will be charged – which is not to their advantage.  Remember, if surveillance pricing is used to charge some people more, that same technology charges relatively lower income consumers less.

Okay, so what?  What online retailer, large or small, shouldn’t have the right to do everything possible with readily available information about your consuming behavior to maximize its sales and profitability?

You, Mr. and Mrs. Consumer, on the other hand, needn’t put up with it.  You don’t like where you’re shopping?  Well, it’s a competitive market.  Choose a browser that doesn’t allow transaction tracking.  Shop somewhere else online and in-person at companies that don’t retain information about your purchases.  Ask Congress to require companies to publish the types of information they are collecting for their own retail purposes and prohibit them from selling it – or just let our competitive retail markets force these disclosures or pledges to the contrary for your benefit or lose your business if they don’t.

“Surveillance pricing” is nothing more than the high tech collection and analysis of consumer behavior information in an age when a great deal of our retail business is being conducted online.  It’s nothing more than today’s version of what retailers have been doing for literally millennia since markets first became a thing.

Certainly, some degree of government regulation would be helpful.  But, in the meantime, if you don’t like all this data being collected by retailers, don’t put up with it.  It’s up to you where you spend your money.  You have choices.  And if you don’t, well, that’s a different problem.  That’s the problem of non-competitive markets, not “surveillance pricing.”  If you’re unhappy with the dominance of certain very large online retailers, deal with that – and do it without depriving smaller companies that sell online from availing themselves of the same marketing tools.

When I was teenager, I worked summers in the hardware/boating department at my local Sears in the relatively small town where I grew up.  Sears Roebuck was then the major retail/catalog department store of its time.  It was before the Internet, computers and artificial intelligence.  I got paid a hourly rate, plus a commission on what I sold.  I was only a kid, on my summer break from college, but I make good money and was number one in my department more often than not.  Do you know why?  Because I knew my product lines and was able to sense what my customers were willing to buy given their personal preferences and abilities to pay.  My understanding of these attributes was crude, but effective. Does that make me a bad guy? Was I taking unfair advantage of good people, or was I just doing naturally what computers are able to do today, much more effectively than I ever could, based on more specific consumer data?

Now, pretend that you’re the online retailer and not the consumer.  Would you deploy regulated surveillance pricing if you could or stay with average pricing as if you were a bricks and mortar store?  And if you did, would you feel that you were doing something wrong?  …Do retailers sometimes charge more or less for their products and services based on the income and preferences of consumers in the markets where they are located?  Of course, they do – or maybe they just stay away from some markets entirely.  Properly regulated computerized marketing technologies are just modern forms of long-term traditional sales techniques and tools – relative to which consumers are far from defenseless, with more choices than ever to express their preferences for where they shop, online or otherwise.

-Les Cohen