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Forum Post: Shopper Cards and Individualized Price Gouging

Posted 2 years ago on Aug. 11, 2012, 3:09 p.m. EST by mserfas (652) from Ashland, PA
This content is user submitted and not an official statement

See http://www.nytimes.com/2012/08/10/business/supermarkets-try-customizing-prices-for-shoppers.html?pagewanted=all (for now this link seems to work, but if it turns "subscriber only" at some point, just type it into Google and click on the Times result and you should still get in)

Now many of us have been adamantly against privacy-invasive shopper card schemes from the beginning (see www.caspian.org). But with the programs reported here, the problems go from being hypothetical to being immediate. The NYT article details programs by which stores are giving individual shoppers DIFFERENT PRICES based on the shopping card history. Example: "creating specific offers and prices, based on shoppers’ behaviors, that could encourage them to spend more: a bigger box of Tide and bologna if the retailer’s data suggests a shopper has a large family, for example (and expensive bologna if the data indicates the shopper is not greatly price-conscious)."

Now I assume there are a very small number of boundaries the stores won't cross. I suppose they will disclaim all responsibility should some Fuzzy Zoeller among their ranks decides to give black shoppers a discount (or a price increase?) on collard greens. But there's no guarantee that their discrimination would not affect people based on political party registration or their known opinions, for example. In any case, I don't think that even that is the worst of it.

The real problem I see is that I think they will invent a "Tantalus paradigm" for deceiving consumers and defeating competition. If one of their Loyal Customers never buys the cheap brand of peanut butter, it will always be very cheap to him. He will assume he's paying a high price for his brand because it is top quality. When he goes to the next market over (which has bought his personal information) it will be the most expensive brand there also. But if he ever bought the cheap brand, soon it wouldn't be so cheap any more - and he might be surprised to learn that his neighbor, who prefers the other brand, thinks that that's the high quality, expensive brand.

Someone whose name I really should remember wrote that "Capitalism is fair the way a fight between Christians and the lions in an arena is fair". When consumers give up their privacy, and give their adversaries detailed intelligence on their habits and preferences, the fight is less fair than ever.

5 Comments

5 Comments


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[-] 2 points by gnomunny (6614) from St Louis, MO 2 years ago

Here's an interesting article on how companies learn your buying habits:

http://mobile.nytimes.com/2012/02/19/magazine/shopping-habits.xml

[-] 2 points by beautifulworld (21588) 2 years ago

If this is where evolution has gotten us, I wish we could decline. What a pathetic waste of time. Think of what the Ancient Greeks and Mayans and Indians and Chinese and Egyptians were doing. We're pathetic!

[-] 2 points by gnomunny (6614) from St Louis, MO 2 years ago

Hi, bw. Yeah, a little 'devolving' would probably do us some good. We're almost like a kid with a loaded gun, in some ways.

[-] 1 points by Mooks (1985) 2 years ago

I would think that savvy shoppers would actually be able to save quite a bit of money. It even says in the article that Ms Vanek is already starting to game the system.

Also, no one has to give their personal information in order to shop at any supermarket I have ever been to. You may get better prices in exchange for your information, but it is by no means required to purchase things. I usually end up forgetting my card and just having the cashier swipe the store card so one can easily get the sale price without ever giving their info (none of the precious gas points though).

[-] 1 points by mserfas (652) from Ashland, PA 2 years ago

I don't think it's always quite so easy. Not every store running such programs will do you that courtesy; and as far as I know some combine the programs with check cashing or store credit cards, making it less than safe for people inclined simply to lie.

More to the point, economically it doesn't matter whether you have a theoretical right to remain anonymous, if 90% of their shoppers are actually being tracked. If the effects of comparison shopping are being blunted because the average consumer can't effectively comparison shop, then your prices (and the profit margins) will be higher, even if you're the oddball who somehow opts out or avoids the tracking. You (and the article) can talk about gaming the system, but the point is, if your cleverness is no longer directed toward deciding which store to buy which things at, but rather, which products from the one store to buy in order to get their most special deal for the day, there really isn't any competition in the marketplace, and your prices will rise.