Monday 19 May, 2014

Price Customization Software – Is It Ethical?

Here’s something that may surprise you. When you book a hotel room with a website like Orbitz, your search results may show you a higher price than your neighbors. Why is this? It’s because of the websites you’ve been visiting and the way you’ve been shopping online.

Price customization software is a tool offered to online merchants that supposedly improves the shopping experience. But what it really does is uses several indicators to determine how much money you’ve got, and then deliver search results accordingly. In other words, it gouges you.

This practice is nothing new at all. Offline salespeople have always sized up customers and offered products accordingly. But some people feel that price customization is particularly invasive. Among other things, it looks at your computer’s cookies and other data. Why should your search results be any different because you make purchases faster or look at Porsche’s website?

Sneak Companies Don’t Want You to Know

How many companies use price customization software? We don’t know because they don’t like talk about it. Funny how that is. But according to a recent article in The Economist, 6 out of the 10 major online retailers use it. This means that if you shop online at all, there’s a good chance that you’ve fallen victim to it.

Many people feel that the practice is unethical. Judging by how silent online retailers are on the matter, they may have an inkling that it’s unethical as well. It hasn’t gotten significant press yet to become a major issue and who knows what will happen when it does. There may be a consumer backlash or regulation that forces retailers to disclose it.

How to Keep Prices Down

What’s ironic is that we surf the Web to find deals. We’re trying to pay less by shopping on the Internet. Although companies like [24]7 and RichRelevance claim that the software enhances the shopping experience by customizing it, you’ll notice that they never offer lower prices, but what if they did? Now, there’s an idea!

*  The software sees that you were searching for Salvation Army locations on Google Maps and offers you a special deal.

*  It takes you two hours of reading reviews and looking inside the book before you buy it on Amazon, so the software offers you the cheapest rate first to save you time and trouble.

*  The program recognizes that your IP address comes from a bad neighborhood in Chicago and figuring you probably don’t have the scratch, offers you the best deal possible.

It never hurts to dream, does it? Well, price customization software is only going to become more prevalent in the future unless some major media attention blows the lid off of it. For now, here are a few things you can do to avoid getting gouged:

*  Use a program that blocks access to your cookies, or watch what websites you search (no looking at golf resorts!).

*  Take your time to make purchases; these programs typically charge more for people who go through the ordering process quickly because they don’t shop around.

*  Use a PC instead of a Mac. At least one software program considers Mac users more affluent.

*  Mask your IP address so that they have no idea where you live.

*  Use price comparison websites instead of going directly to the website; again, this shows that you’re a bargain hunter.

Bob Steele

Bob Steele

Bob Steele is an entrepreneur, software developer, marketer, and author living in the Denver metropolitan area. He’s an avid outdoorsman who loves skiing, hiking, fishing, boating, and just plain having fun. His interests include games, space, technology, physics, cooking (well eating actually), economics, business, internationalism, and team sports. With over thirty years of professional consulting experience, Bob has been exposed to many diverse business models and has gained a sensible approach to life. Bob’s company, WaveCentric is focused on commerce, marketing, and entertainment related products.

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