ATLANTA — A price that is targeted just for you when you shop online. It could be different than the price someone, who lives as close as next door, pays.
“This is creepy and invasive, and ultimately, is not for our own good,” said Sara Geoghegan with the Electronic Privacy Information Center, or EPIC.
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It is called surveillance pricing. When we shop in the store, we see the prices right there on the shelf. But when shopping online, there is no way to know if you are seeing the same price as someone else.
The Federal Trade Commission put out a notice in January announcing a study into surveillance pricing. The FTC warned that initial findings show, “retailers frequently use people’s personal information to set targeted, tailored prices for goods and services.”
To try to catch it on camera, we teamed up with our sister stations from around the country, asking dozens of shoppers in eight cities to check the prices of six products, three times a day at some of the nation’s most popular stores.
Most of the prices were the same. But there were some hard-to-explain exceptions.
On a Walmart TV, one of our Atlanta price checkers was given a price over $1,000, while every other tracker got a price under $900.
Channel 2 Consumer Investigator Justin Gray stood side by side with that price checker, JP League, and both pulled up the items on their phones.
They saw different prices. League got a price $149 more expensive than Gray.
“We’re inches away from each other and apparently that’s enough for a price difference of a hundred some dollars,” League said.
“We only noticed this because we were actually looking for it,” he continued.
That’s what privacy experts say makes this so unfair for shoppers.
“Everything sort of stacked against the consumer,” said Northeastern University Professor Alan Mislove.
Mislove was part of the FTC team that sent out the January warning and is now developing his own study at Northeastern to try to track surveillance shopping.
He says it is designed to be difficult to detect.
“You as an individual have very little ability to understand what data is being collected, understand how that potentially is being used against you,” Mislove said.
“I love the convenience of it,” Newnan resident Amber Miller said about online shopping.
It’s a 30-minute drive to the closest Target from her home, so she relies on online shopping for her family of four.
But even before hearing about our testing, she had been noticing some strange things.
Miller‘s mother often sends her links of things to buy.
But the prices don’t always match.
“There’s a definite difference between the pricing I’ve seen on certain items for here and then the pricing in my mom’s town in Indiana. I’ve run into that many times,” Miller said.
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Another example from our test was a grill for sale at Lowe‘s.
This time it was Gray who got a price that did not match everyone else. Lowe‘s offered Gray a price of $369.
But nearly all our other checkers across the country, dozens of them, saw the same model at just $299. A difference of $70.
One checker in Orlando also received the higher price. What we noticed is both testers who got the higher price, live in the city.
If you switched your store location on the Lowe‘s app from the city to the suburbs, just the few miles from the Edgewood to Chamblee stores here in Atlanta, you got offered a lower price.
“One thing you can do is try different ways of accessing the service. So there have been instances where if I access something over the mobile app versus over the website, I actually get different prices,” Mislove said.
“Unless you’re going through this process, You’re never going to know that you’re paying more for it,” League said.
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And that’s the problem.
Sara Geoghegan says consumers are left in the dark on how the app is spitting out that price.
“This is not about supply and demand. This is about profiling an individual and using that individual‘s history. to determine a willingness for a price that they would pay,” Geoghegan said.
The FTC says big retailers pay big bucks to third-party companies that collect data on everything from your salary to your shopping habits.
Stores can follow your mouse movements on a web page and how long you leave items in your shopping cart.
“So, there’s a lot of companies out there that are advertising the ability to do this. And so, we have a good sense that this is happening somewhere,” Mislove said.
And that leaves shoppers like Miller unsure about what they are seeing.
“I don’t think you can be confident you’re getting the best price,” Miller said.
Walmart and Target both told Channel 2 Action News they do not use surveillance pricing.
A Walmart spokesperson followed up by sending this statement:
“Walmart adheres to an everyday low-price strategy focused on offering consistently low prices to deliver on our purpose of helping customers save money and live better. We know that price matters to our customers, and they can count on us to be an advocate for them to get the best prices possible.”
The Home Depot sent this statement in response to our inquiry about surveillance pricing:
“We go to great lengths to ensure consistent pricing for our customers throughout their entire experience with us across online and in our stores. Our customers may see price differences depending on what they have selected as their local store online, and those prices may vary based on geography. Pro Xtra members can qualify for discounts and other benefits.”
So far, we have not heard back from Lowe‘s or Best Buy.
The FTC abruptly ended public comment into its surveillance pricing study the day after President Trump took office.
We reached out to the FTC to ask whether the study’s been stopped under the new administration, but they would not give us just a yes or no answer.
An FTC spokesperson only replied with, “we have no comment.”
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