Worried you’re being overcharged when shopping online? Listen to this

When shopping online, you and another person could be buying the exact same item, and you'll pay more because of who you are, where you are and your purchase history. In this episode of Life Kit, author Lindsay Owens shares tips from her new book Gouged on how to avoid getting ripped off by surveillance pricing — and get a fair price. Follow us on Instagram: @nprlifekit https://www.instagram.com/nprlifekit/?hl=en Sign up for our newsletter here. https://www.npr.org/newsletter/life-kit Have an episode idea or feedback you want to share? Email us at [email protected] mailto:[email protected] Support public media with NPR+ and enjoy perks for over 25 podcasts like this one. This show’s perks include sponsor-free listening and convenient playlists of popular help topics like personal finance, getting healthy, and more. Learn more at plus.npr.org http://plus.npr.org/. See pcm.adswizz.com https://pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. NPR Privacy Policy https://www.npr.org/about-npr/179878450/privacy-policy

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  This week on Up First, the midterms, less than 15 days away. President Trump, Vice President J.D. Vance, and former President Obama all crisscrossing the country, rallying voters in key races from Michigan to Georgia to North Carolina. Join us every morning as we guide you through the home stretch of this election season. Up First on the NPR app or wherever you get your podcasts.

• 0:24Marielle Segarra?

  I have a VPN, and I've seen the price of a rental car change dramatically based on whether I had my VPN on and also if I checked back a different day. It could change by $200 or something like that.

• 0:39Speaker 02

  Yeah, this is the way that Americans are starting to understand that something pretty big has shifted in the economy and that that is the way pricing works. We used to sort of assume that there was a standard price for items. And I think little experiments, like the one you just described, are becoming more and more common. And they're the ways in which many Americans realize that everything has changed about pricing.

• 1:10Marielle Segarra?

  Hey, it's Marielle Segarra. You're listening to Life Kit, and you just heard from Lindsay Owens, author of the book Gouged: The End of a Fair Price and What That Means for Your Wallet. Lindsay has a PhD in sociology and researches economic forces like inflation. And she says technology has changed the way retailers price everyday items: groceries, plane tickets, that shirt you have your eye on.

• 1:35Speaker 02

  Pricing has gone high-tech. And in many ways, what we're seeing is big tech sort of reinventing the ripoff. You know, these are old tricks, but they've been supercharged by new technologies.

• 1:48Marielle Segarra?

  And companies are not necessarily being secretive about this.

• 1:52Speaker 02

  Someone took to Twitter to mention that the price of their airline ticket had increased $200 overnight on JetBlue. And they tweeted, "Look, man, I'm just trying to get to a funeral. Like, what gives here?" And JetBlue tweeted back, "Have you tried clearing your cash and your cookies?"

• 2:12Marielle Segarra?

  Oh, my god, stop.

• 2:14Speaker 02

  Yeah, this was JetBlue's own Twitter account, like, company Twitter. And it was this kind of unbelievable confession in broad daylight by corporate America that your data decides your price these days. And if you want a better price, you should try tricking us.

• 2:36Marielle Segarra?

  Wow. Now, JetBlue did later delete this tweet. And in a statement to NPR, the company said it does not engage in surveillance pricing or use personal information or web browsing history to set individual prices. The company also said the reply to the Twitter complaint was an error made by a customer service rep and that the suggested steps would not have changed the airfare. But a congressional inquiry was launched to investigate whether JetBlue uses surveillance pricing, and a class action lawsuit was filed against JetBlue earlier this year, accusing the company of tracking customer data and using that to set prices.

• 3:17Marielle Segarra?

  On this episode of Life Kit, I talk with Lindsay about how pricing has drastically changed and what we can do about it, including how to cover up your trail so it's harder for retailers to watch you and then sell you stuff at personalized prices. We'll also talk about what comparison shopping means now.

• 3:39Speaker 03

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• 4:07Speaker 05

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• 4:32Speaker 06

  Hi there, I'm Brittany Luce. And not to brag, but I host a really fabulous podcast. It's called It's Been a Minute. I love making it, and I think you'll love listening to it. Over the last year, hundreds of thousands of listeners have been tuning in. And I gotta say, if you haven't yet, you're missing out. Listen to the It's Been a Minute podcast from NPR today.

• 4:56Marielle Segarra?

  Lindsay says when you ask Americans, "What is a fair price?", they often point to something called cost-plus pricing.

• 5:03Speaker 02

  Basically, they like the idea that the price is based on how much it costs to make the item, plus a little bit of margin for the seller. They're fine with that, too, right? They don't expect you to sell at a loss or to break even. And what we find when we look at these experiments is when you start giving people experimental conditions that veer from cost-plus pricing. So, "We're charging you more because it's snowing outside, and we think we can charge you more for a shovel, not because it costs more to make the shovel that we have on our shelf." People get really upset about that. They feel like that's very unfair.

• 5:36Marielle Segarra?

  Right. It's like, plus a margin, but not a ridiculous margin.

• 5:43Speaker 02

  Yeah, and, you know, we often get into conversations about pricing, particularly when resources are scarce. And so, we obviously had this in a national conversation about World Cup ticket prices over the summer. You know, FIFA's decision to use dynamic pricing for soccer tickets for the first time ever, actually in the organization's history, in which effectively auctions off the tickets to the highest bidder. And, you know, how does this relate to cost-plus? Well, of course, this is not about how much the ticket costs. This is about the market determining how willing you are to pay, right? And the people who are willing to pay the most are deemed to value the ticket the most.

• 6:24Marielle Segarra?

  When you look at a sentence like, whoever values it most will pay the most, that's assuming that everyone has an equal amount of money to pay from, right? Like, someone could really value something, but the most they can legitimately pay for it without going broke is X, you know? And then someone else can value it very little, but they have a ton of money. So, yeah, okay, I'll buy it. You know, it doesn't really make sense to tie value to money in a country where there's so much wealth inequality.

• 6:57Speaker 02

  100%. And when you ration or allocate scarce resources that way, you know, like, what you insure is that you're gonna get John Arnold and Bill Gates and people like that enjoying the World Cup, and you're actually gonna have really passionate fans who would value that experience. You know, I mean, they almost sort of couldn't put a dollar amount on how much they value that experience, you know, watching it at a sports bar on their couch.

• 7:24Marielle Segarra?

  How has the way companies price their products changed over the past, say, five or 10 years?

• 7:30Speaker 02

  The most, I think, egregious way is this idea of personalized pricing. This is sometimes better known as surveillance pricing. But it is the intersection of two things that the American people just hate. The first is being spied on, and the second is being overcharged. And personalized pricing marries those two terrible features of corporate America and the economy, right? The idea is, collect data on you to better ascertain how much they can charge you. So, a good example of this, to go back to your VPN example, is there was a study a

• 8:12Speaker 02

  while back out of San Francisco, which showed that Expedia was charging people from the Bay Area more than people from Middle America for the same hotel room in Manhattan. So, the idea being, the hotel in Manhattan doesn't have a price. You and our estimate of your net worth, based on where you're logging on from, is gonna determine that price.

• 8:40Marielle Segarra?

  Takeaway one: Pricing has gone high-tech. One of the most surprising examples is personalized pricing, also called surveillance pricing. Companies will use your browsing data, demographics, and purchase history to decide what to charge you. Retailers will also use algorithms to run pricing experiments.

• 8:59Speaker 02

  And the best example of this, my organization late last year exposed a massive experiment that Instacart was running on millions of Americans while they were shopping for their groceries. They were basically using a platform that they had bought from an AI company called Eversight to run A/B tests on Americans, to figure out how much they would pay for every item in their grocery cart. And what we found is, even people logging on to pick up their groceries from the exact same pickup location at the exact same time, the exact same grocery items, you know, were being charged as much as 23% more than other shoppers at the same time. You know, companies have always really run A/B tests in the store, right?

• 9:45Marielle Segarra?

  For instance, a retailer might test out a different price for the same item at two different store locations.

• 9:51Speaker 02

  But they're sort of able to do this on a totally different scale, totally hidden from sight. This was one of the things that Eversight, you know, really bragged about when they built this price experimentation platform, is, you know, the feature of this is that, you know, your customers won't know it's happening. You can run these tests without their knowledge.

• 10:10Marielle Segarra?

  Yeah, because I think the idea of going into a physical store and picking up an umbrella, and then, you know, the person behind you picks up the same umbrella, and that you'd get into the same line and check out, and you would get charged a dollar more than the person behind you, that makes me want to flip a table.

• 10:30Speaker 02

  Totally.

• 10:30Marielle Segarra?

  But that is what's happening online.

• 10:33Speaker 02

  Yeah, that is exactly what is possible online, because we're atomized, we're isolated, the social context is gone.

• 10:40Marielle Segarra?

  Yeah.

• 10:41Speaker 02

  I have no idea that I just paid $3 more than you for the same umbrella. And so, we're not mad about it, and we go about our day. And they pocket the $3.

• 10:52Marielle Segarra?

  Coming up, Lindsay's tips on how to get around surveillance pricing. Retailers run their experiments, and you can, too.

• 11:06Speaker 07

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• 11:11Speaker 07

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• 11:53Marielle Segarra?

  Takeaway two, Lindsay's first tip to duck and weave and avoid surveillance pricing is to stop shopping through apps or while signed into a particular retailer's website.

• 12:04Speaker 02

  Loyalty programs and in-app shopping are ways in which you give companies not only a lot of information about yourself, your location, you also give them full information about your purchase history. They know what you click on, they know what you buy, they know what you click on and don't buy, they know what you hover over but don't click on but don't buy, they know what you leave in your cart. You know, you offer a lot of data that can be, you know, potentially turned against you in pricing decisions, whether that's fewer discounts or higher prices.

• 12:43Marielle Segarra?

  And I think that a lot of people, you know, they know that the trade-off is data privacy. If they sign up for a loyalty program, they say, okay, but I'm going to get 10% or 15% off, so who cares? So, they know what I buy, whatever. But then, if the company is using that data to actually price items higher, then you're not saving the money that you think you're saving.

• 13:07Speaker 02

  Yeah, also, when you're in an app, you're in their user interface, their closed system. So, you may not even realize that the prices that are being offered have been personalized or tailored to you.

• 13:18Marielle Segarra?

  Another tip you have is to make sure you're comparison shopping and not just in the way people might traditionally think about it.

• 13:26Speaker 02

  Yeah, look, I think they're running all these experiments on us. And of course, one way to try to, you know, find a better price is to kind of turn the experiment back on them, right? And you and I log on at the same time together and see who gets the better deal. And then you buy it and I Venmo you for my share. Or you sit down with your roommate on the couch, or you sit down with your husband on the couch, or you call your mom and you have her login and try logging in versus not logging in, try in the app versus on the website, versus in the brick and mortar store, versus through a third-party broker. You know, updating how you think about comparison shopping and comparison shopping in a much more capacious and wide-ranging way is the best sort of individual consumer advice because

• 14:07Speaker 02

  that allows you to get a snapshot of how stable the pricing is, which is a great outcome, right? Oh, it's the same in the app, it's the same in the store, it's the same on the website, my friend is getting the same price. The roll-neck sweater from J. Crew is indeed $79.99. Great, I'm going to buy it today, right?

• 14:27Marielle Segarra?

  Yeah.

• 14:27Speaker 02

  Like, that's your best outcome, right? Is like, you're not being exposed to personalized pricing.

• 14:33Marielle Segarra?

  Takeaway three, make sure you're comparison shopping, especially for big purchases. Check the price of a product or service across multiple devices. Like, if you're ordering a car through a Rideshare app, ask your friends to check the price on their phones, too. Or if you're buying a plane ticket or a product, look at the website on your phone, on someone else's phone, on your laptop, while logged in, while not logged in, with and without incognito mode, and also with and without a VPN. I use a VPN when I shop online. I wonder, can you explain what it is for people who don't use one or who've never heard of it?

• 15:10Speaker 02

  So, VPN is a virtual private network. And what a VPN allows you to do is mask your location. So, when you log on without a VPN, your IP address is giving the company or the retailer where you're doing your online shopping, information about where you're logging on from. They often can also ascertain what you're logging on from, if it's an iPhone, if it's an Android, if it's a PC, if it's a Mac, right? But a VPN can mask some of that background information. And it can also allow you to set a preferred location. And so, you could even run your kind of pricing experiments using your VPN, where you change

• 15:52Speaker 02

  the location that you want to be sourced from. And that allows you to see if, you know, prices are varying by location. San Francisco Bay Area versus, you know, Greater New York Area, for example, or Nashville, Tennessee, my hometown, right? To see if you can get a more competitive price coming from a different space.

• 16:12Marielle Segarra?

  And then you also talked about clearing your cache and clearing cookies. What does that mean?

• 16:17Speaker 02

  Yeah, so the idea here is companies collect data while you browse online, right? And so, they are basically absorbing a breadcrumb trail of your browsing history. And so, one thing that you can do is you can clear that data so that a company doesn't have access to it and you're effectively starting as tabula rasa as you could imagine when you're browsing. And so, you know, for example, in the JetBlue example, you know, this guy had been looking into flights for a while, right? He was trying to go to a funeral, he was checking to see if the flight prices were going up or going down. You know, JetBlue knows that he has been researching flights for a while and they

• 17:02Speaker 02

  think, oh, this guy's really interested in getting to this destination, right? And the idea is if you can clear that data before you go on to make a purchase, then that data isn't available to the company to use against you in that way.

• 17:16Marielle Segarra?

  You also talked about trying to stop being so predictable, so like, throwing them off the scent a little bit by switching brands or changing the times and places you shop or using cash sometimes or using a different credit card. How does this help?

• 17:32Speaker 02

  Yeah, so, you know, when we talked earlier about the types of data that's really useful for companies to have about you in thinking about pricing decisions, one of them, of course, is your purchase history and how likely you are to buy things, how much of a sure thing you are. And so, I think, you know, when a company realizes that you're always going to buy milk on a Tuesday, you're always going to buy cinnamon rolls on Sunday, you're always going to buy your morning coffee at 8:00 AM, your afternoon pick-me-up coffee at 3:00 PM, you know, they can get really comfortable with your purchase history and they can use it to ascertain, you know, how competitive their pricing needs to be or not. And so, you know, some of what I suggest is, you know, being a little less predictable

• 18:17Speaker 02

  is a way to kind of get back into the fold where a company might actually want to push you a discount again, for example, because they're not sure if you're going to be able to buy it at the higher price, they might want to bring you in at a lower price.

• 18:28Marielle Segarra?

  You talk about taking back some privacy. And that means basically going through your phone and being like, what permissions do these different apps have? And how can I limit the permissions as much as possible?

• 18:42Speaker 02

  Yeah, look, you decide in your app settings how much data you want to hand over to these companies in some cases, right? You can turn off location data, you can turn off other forms of tracking, you can turn off inter-app sharing, right? So, one app isn't sharing data with another app, for example. So, those are, I think, things that you can do to try to keep some of your privacy protected in the e-commerce setting and in the app setting in your phone.

• 19:09Marielle Segarra?

  Takeaway four, clear your browsing data routinely. Go through your devices and limit the permissions that you grant to apps. Ask yourself questions like, does this app really need to know where I'm located? Also, use a VPN and try setting it in different locations to check prices. What about just shopping in person?

• 19:29Speaker 02

  Yeah.

• 19:29Marielle Segarra?

  Instead of online?

• 19:31Speaker 02

  Shopping in person is a great one. You will be subjected to less of the high-tech reinvention of the ripoff if you are shopping in person. If you shop local, your mom-and-pop small business is not running a super sophisticated algorithmic price-fixing experiment on you, right? Like, that's not happening. But a lot of these technologies are seeping into brick-and-mortar stores. And so, there are a lot of new technologies in brick-and-mortar stores that are making pricing more unpredictable. Over the past couple of weeks, we've seen a lot of people filming TikToks at Walmart. And what they keep revealing is there are a lot of items at Walmart these days that don't have a price on it at all.

• 20:15Speaker 02

  You go to the clothing aisle and you pick something up, you've got a tag with a size and a brand, and you know it has a SKU, you can take it up to the cashier, but it doesn't have a price. And the lack of transparency without a posted price creates a lot of uncertainty for people on a budget. The best example is electronic shelf labels are popping up everywhere, in grocery stores, in large, big-box retailers, organic grocery stores like Sprouts. And so, you are going to be subjected to more price variation and more unpredictable pricing throughout the grocery store. There are a lot of companies that are exploring integrations between the grocery cart and the electronic shelf label and your personal information, right?

• 21:00Speaker 02

  So, your cart has a little computer on it, you sign in with your loyalty program, and that integration, you know, allows for things like personalized pricing even in a brick-and-mortar store. So, I don't think, you know, brick-and-mortar stores are a panacea, and I think they're increasingly, you know, starting to be subject to some of these same concerns that we see in e-commerce. But absolutely, you've got many better options with brick-and-mortar.

• 21:29Marielle Segarra?

  Takeaway five, shop in person, but keep in mind that personalized pricing is seeping into big retailer's stores, too. If you don't see a price tag, or if you see an electronic shelf label, know that you might be paying more than the person behind you. Small retailers, on the other hand, mom and pop stores, those are unlikely to be using high-tech personalized pricing, at least for now. If it's a service you seek, try doing it the old-fashioned way. Get a cab instead of ordering an Uber, or call up your local takeout restaurant, order food, and go pick it up instead of using a delivery app. What do you do personally? How do you shop?

• 22:06Speaker 02

  I try to be as smart as I can about my own shopping, and I do follow a lot of the, you know, advice I give in the book, including like, my husband and I are always exchanging prices, right, to see who got the better deal, to the point where it's sort of like, takes us way too long to like, buy a flight, right? Because we're sort of like, well, who, what is your price? And like, did you try the app? And like, what if we went online? And I think the reason that I can help explain what's happening is I'm experiencing it myself every day in e-commerce. I'm also frustrated by the fact that comparison shopping has gotten so much harder. I'm also frustrated by the fact that pricing has gotten so unpredictable. I'm frustrated by the fact that prices are high, but I have felt

• 22:50Speaker 02

  for a long time, there was something else going on underneath, something changing about the basic bargain that we had in the economy when I was growing up, about how pricing worked. I stood in line for concert tickets rather than participated in an auction where concert tickets went to the highest bidder. Like, I'm old enough to remember, you know, when companies did things differently. And that's really one of the reasons why I wanted to write this book and frankly, offer Americans some validation. Like, this isn't in your head. There have been really big changes. And understanding that and learning that is a big part of how we can start to call attention to it and start to fight back and actually restore a fair price in this country, in our economy, and give shoppers a semblance

• 23:34Speaker 02

  of fairness in our economy.

• 23:37Marielle Segarra?

  Lindsay, thank you so much for this.

• 23:39Speaker 02

  Thanks for having me.

• 23:43Marielle Segarra?

  All right, time for a recap. Takeaway one, pricing has gone high-tech. One of the most surprising examples is surveillance pricing, where companies use your browsing data, demographics, and purchase history to decide what to charge you. Takeaway two, stop shopping through apps or while signed into a retailer's website. Takeaway three, make sure you're comparison shopping, especially for big purchases. Check the price of a product or service at the same retailer across multiple devices while logged in and not logged in, with and without incognito mode, and with and without a VPN. Takeaway four, clear your browsing data routinely, and also go through your devices and limit the permissions that

• 24:26Marielle Segarra?

  you grant to apps. And takeaway five, shop in person, but keep in mind that personalized pricing is starting to seep into big retailer's stores, too. Consider small and local stores instead. Call a cab or a car service instead of a ride share through an app, or order your takeout on the phone and go pick it up. That's our show. By the way, I was wondering, if you're enjoying the show, would you spread the love a little bit? Think of one person who might benefit from this episode and send it their way. Thanks for being part of the Life Kit community. This episode of Life Kit was produced by Claire Marie Schneider. It was edited by Sylvie Douglas. Our digital editor is Malika Gharib, and our visuals

• 25:09Marielle Segarra?

  editor is CJ Riechelmann. Megan Cain is our senior supervising editor, and Lauren Gonzalez is our executive producer. Our production team also includes Andy Tagle, Lennon Sherburne, and Margaret Serino. Engineering support comes from Jimmy Keighley. Fact checking by Andrea Lopez-Cruzado. I'm Marielle Segarra. Thanks for listening.

• 25:36Speaker 07

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