What you don't know can cost you!

Do You Pay More Because of Variable Pricing?

by Melanie Toye


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If you paid full price for a product online and then found out your neighbor paid a cheaper price on the same product, from the same online store, would you feel annoyed?

Or what if you paid for a product and then wanted to buy more the next day to discover the price had risen? Same store. Same product.

What had changed? Online retailers are finding ways to move their stock through variable pricing. Variable pricing means that not everyone pays the same price for the same item. Prices may vary based on age, geography, how much you buy, or whether you've bought it in the past.

What stores utilize variable pricing?

  • Amazon changes its prices every 10 minutes on average.
  • Walmart changes its prices roughly 50,000 times a month.
  • Sears also implemented price changes to about 25% of its products during the holiday season. (Statistics provided from Econsultancy)
  • Other online sites that consistently adjusted their prices and displayed different product offers, based on a range of characteristics that could be discovered about the user, include Staples, Discover Financial Services, Rosetta Stone Inc., and Home Depot Inc. (As investigated by the Wall Street Journal)

Apple has been using variable pricing for a couple of years by offering a higher set price for iTunes new songs. More recently, in June 2015, Apple advised a change in their price tier details, which offers really low price options for apps in selected countries. Set prices for their apps were below the standard $0.99 in India, Russia, Indonesia, Mexico, South Africa, and Turkey.

Variable pricing has become so prevalent that the White House has issued a 21-page report on the subject.

A real time example of variable pricing online

In less than two minutes apart, I found the exact same product offering a $37.71 difference!

The product was Olay CC Cream Total Effects Daily Moisturizer plus Touch of Foundation (1.7 fl. Oz.) that was advertised on Amazon for $16.33.

Yet, I signed out and found the exact same product on Amazon priced $54.04. That is a $37.71 difference. Now if I didn't go hunting to see if it was cheaper from the major retailer, I could have paid the $16.33 price or worse the $54.04 price.

Do You Pay More Because of Variable Pricing

 

Do You Pay More Because of Variable Pricing

Related: Is Amazon Hiding It's Best Deals?

Do you agree or disagree to variable pricing?

In a report compiled by the Annenberg Public Policy Center of the University of Pennsylvania, they sought a nationally representative sample of 1,500 adults who used the internet and asked 17 true-false questions.

The found that:

  • 76% agree that it would bother them to learn that other people pay less for the same products.
  • 64% agree that it would bother them to learn that other people get better discount coupons than they do for the same products.
  • 66% disagree that it's okay with them if the supermarket they shop at keeps detailed records of their buying behavior.
  • 87% disagree that it's okay if an online store they use, charges people different prices for the same products during the same hour. (Open to Exploitation: American Shoppers Online and Offline by Joseph Turow, Lauren Feldman, & Kimberly Meltzer. A Report from the Annenberg Public Policy Center of the University of Pennsylvania)

Protect your cash

How do you know if what you are buying is a variable price or fixed price?

  1. Do your research - Do you have a product that is available at multiple outlets? Go to the stores, find the cheapest price, and then go online to see if you can find it cheaper. Don't forget some stores will even give a further 10% off the price if you find it cheaper elsewhere.
  2. Shop online smarter - Unsure who is selling the product? Simply type in the product in search engines to find the cheapest rates. Also try price comparison sites, such as PriceGrabber.
  3. Quiz: Find the Best Credit Card for You

  4. Understanding privacy tools - Internet cookies can be used to track your online shopping behavior. This is a way online sellers can specifically target their products to what you like. If you mainly look at women's shoes online, your search feeds and advertisements will showcase these types of products. To stop this from happening, you can simply elect to opt out of targeted advertising when signing up or registering with online shopping websites.
  5. Don't buy straight away - Even the time of day could impact on the price you pay. If you really want to ensure you get the best price, don't buy straight away. Check the best time to buy by reviewing the product at different times throughout the day. Sellers can receive statistics on the highest times of buying from their websites and can lower or push up prices during their peak times.

Melanie Toye is a creative, engaging, story teller and has written and published 11 books to date. Melanie's career also involves freelance writing and she is a woman surrounded by males, i.e. wife, mother of two gorgeous boys and two male German shepherd dogs. You can follow Melanie Toye via her blog, Twitter, Facebook, LinkedIn and read a free sample of her books here.

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