The American consumer is back for the first holiday season since 2007. But while shoppers are hitting the malls, they're also being choosy - and comparison shopping is more easily done online. Web sales will rise 11 percent in November and December, according to ComScore, compared with about 3 percent for sales in bricks-and-mortar stores. Online shoppers can get better prices and perks like free shipping. Online merchants, however, are not exactly defenseless. One way they fight back against picky customers is through "dynamic pricing," also called "discriminatory," "personalized," or "variable" pricing. And, for the most part, customers have no idea it is happening.
In its most brazen form, it works like this: Retailers read the cookies kept on your browser or glean information from your past purchase history when you are logged into a site. That gives them a sense of what you search for and buy, how much you paid for it, and whether you might be willing and able to spend more.
They alter their prices or offers accordingly. Consumers - in the few cases they recognize it is going on, by shopping in two browsers simultaneously, for instance - tend to go apoplectic. But the practice is perfectly legal, and increasingly common - pervasive, even, for some products.