Dynamic pricing strategies, sometimes referred to as "surveillance pricing," have reportedly led to consumers being offered different prices for identical goods or services based on various personal data points. These data points can include a user's operating system, geographic location, or proximity to competing retailers.
In 2012, reports indicated that the travel booking site Orbitz presented Mac users with hotel options that were, on average, 30% more expensive than those shown to PC users, based on an observed spending trend among Mac users. The same year, Staples.com was reported to display higher prices to customers located further from an Office Depot store.
Further investigation in 2015 revealed that The Princeton Review offered its premier test preparation course at prices ranging from $6,600 to $8,400, depending on the customer's zip code. This geographic pricing approach reportedly resulted in Asian customers being nearly twice as likely to be quoted a higher price.
Other alleged instances of surveillance pricing include the Target app showing higher television prices to customers physically present in a Target parking lot, and Home Depot customers in affluent areas reportedly paying less for certain items. Delta Airlines reportedly discontinued a similar pricing practice following public criticism.
The prevalence of these practices has led to numerous online claims suggesting that minor alterations to a user's digital footprint, such as using a VPN to change an IP address or shopping from a public library computer, could result in lower prices. However, verifying these claims has proven challenging.
Video journalist Chris Parr, known as Chris the Producer on YouTube, conducted an experiment to test the impact of surveillance pricing. Rather than simple IP address changes, Parr established a new consumer persona by registering an LLC in Wyoming, complete with its own credit card and phone.
To create a realistic data trail for this new persona, Parr enlisted an actor. His experiment included unusual methods, such as using a drone to purchase a White Castle Crave Case from airspace above a wealthy neighborhood. Parr noted that from the perspective of data collectors, the phone's geolocation would simply indicate its presence in that area, without revealing its aerial position.
