Exposing price discrimination in online shopping (Marketplace)

Summary

This video script explores the phenomenon of price discrimination in online retail, where customers are charged different prices for the same product based on their personal data. The script investigates how retailers use cookies and browsing history to tailor prices, and demonstrates through tests that different devices and browsers can yield varying costs for services like hotel bookings and car rentals. The segment also touches on the broader implications of dynamic pricing and the desire for transparency from consumers.

Takeaways

• 🛒 Online retailers engage in price discrimination, charging different customers different prices for the same product based on personal data.
• 🔑 Retailers collect data on consumers to understand their needs and desires, using this information to adjust prices strategically.
• 🤔 Shoppers have mixed feelings about sharing personal information for potentially better prices, with concerns about privacy and data protection.
• 🍪 Cookies are used by websites to track consumer behavior online, allowing for targeted ads and personalized pricing based on browsing history.
• 💻 The script demonstrates how different devices and browsers can show different prices for the same product, highlighting the complexity of online pricing.
• 🌐 Incognito mode can provide different pricing information, potentially free from personalized pricing based on browsing history.
• 🏨 Price differences were observed in the script for hotel rooms and car rentals on travel sites like Travelocity and Priceline.
• 📈 The script reveals that prices can vary significantly based on factors like device type, location, and browsing mode (regular vs. incognito).
• 🗳️ A survey mentioned in the script shows that a majority of Canadians want more transparency from online companies regarding their use of customer data.
• 🛫 The concept of price discrimination extends beyond retail to services like travel, where different prices are offered based on various factors, including international status.
• 📊 Price tracking tools can help consumers navigate dynamic pricing strategies by alerting them when prices for desired items drop.

Q & A

What is the main topic discussed in the video script?

The main topic discussed in the video script is the practice of price discrimination in online retail, where different customers are charged different prices for the same product based on their personal data.

What is the purpose of a computer cookie in the context of online shopping?

A computer cookie is a small file that websites can place on a user's device to collect certain information as the user surfs the web, allowing the retailer to target the user with ads and potentially adjust prices based on the user's browsing habits and preferences.

What is 'steering' in the context of online shopping?

Steering refers to the practice where websites display search results in an order that is influenced by the information they have about the user and their spending habits, potentially leading to different users seeing different prices for the same product.

What does the term 'incognito' browsing refer to, and how does it relate to the script?

Incognito browsing refers to a private mode in web browsers where the user's browsing history, search history, and cookies are not saved. In the script, incognito browsing is used to test whether prices for products like hotel rooms and car rentals differ from those seen in regular browsing sessions.

What is the significance of the price differences observed in the script during the hotel room and car rental searches?

The significance of the price differences is that they illustrate the concept of price discrimination, where online retailers use data about individual consumers to adjust prices, potentially offering discounts to some and charging more to others based on factors like location, browsing history, and perceived willingness to pay.

What does the script suggest about the public's perception of price discrimination in online shopping?

The script suggests that the public is concerned about price discrimination, with a majority of Canadians surveyed expressing a desire for more transparency from online companies regarding the collection, use, and sharing of customer data.

What explanation does Expedia provide for the price differences observed in the script?

Expedia explains that the price differences observed were due to the testers initially visiting the U.S. version of the hotels.com site, which tagged them as U.S. customers. Even when they later visited the Canadian site, the system still viewed them as American, leading to different prices being displayed.

What is the role of 'dynamic pricing' in the context of online retail, as mentioned in the script?

Dynamic pricing refers to the practice where online retailers constantly adjust the prices of their products based on various factors such as demand, supply, time of day, and customer behavior. This can lead to significant price fluctuations, as illustrated by the example of Amazon changing its prices millions of times a day.

What are some strategies suggested in the script for consumers to navigate price discrimination and potentially find better deals?

The script suggests using incognito browsing to see if prices are different without the influence of personal browsing history, deleting third-party cookies to reduce targeted pricing, and using price tracking tools to monitor price changes and receive alerts when prices drop.

What is the general sentiment of the script's participants towards the practice of price discrimination?

The general sentiment of the participants is one of concern and a sense of unfairness, with some expressing the need for more control over their personal data and a desire to be more diligent in finding the best prices using different platforms and technologies.

Outlines

00:00

🛍️ Online Price Discrimination Revealed

The script opens with Charlsie introducing a Black Friday special and diving into the phenomenon of online price discrimination. It illustrates a scenario where three shoppers are charged different prices for the same product without the use of coupons or loyalty points. The video aims to investigate how retailers use personal data to charge varying prices. The panel includes Ali, Grant, and Nadia, who represent different online shopping habits. Tech expert Jesse Hirsh explains that retailers leverage collected information to manipulate prices based on individual needs and desires. The segment ends with a discussion on consumer willingness to trade personal information for better prices and an introduction to how online retailers track consumer behavior through cookies.

05:02

🔍 Uncovering Digital Price Variations

This paragraph focuses on the concept of 'steering', where websites display search results based on customer profiles and spending habits. The team conducts a pricing test on Travelocity and Priceline, searching for hotels in Panama City and Orlando during different times, revealing significant price discrepancies across different devices and browsing modes. The test highlights how past consumer behavior, such as bargaining, can influence the prices offered. The script also includes a pre-test revealing varying prices for the same hotel room and a discussion on the lack of transparency in online pricing, with a majority of Canadians surveyed expressing a desire for more transparency from online companies regarding their use of customer data.

10:03

🗺️ Expedia's Take on Price Discrimination

The script moves to address the issue of price differences on Expedia-owned sites like Travelocity and hotels.com. Charlsie and the team conduct tests that uncover price variations based on browsing history and device use. Expedia's VP of communications, Sarah Gavin, provides an explanation for the discrepancies, stating that testers were tagged differently based on their browsing history, which led to different prices being shown. Gavin confirms that price discrimination is a deliberate practice to offer deals tailored to various customer profiles, including international travelers, mobile users, package bookers, and members.

15:04

📉 The Impact of Dynamic Pricing on Consumers

The final paragraph delves into the broader implications of dynamic pricing and price discrimination. Charlsie discusses the lack of transparency and fairness in online pricing strategies, questioning the effectiveness of 'best price guarantees' when prices vary based on browsing methods. Retail futurist Doug Stephens discusses the evolution of retail pricing, explaining how technology enables retailers to optimize prices for individual consumers. The script also touches on Amazon's use of surge pricing and the difficulty consumers face in navigating this unpredictable pricing landscape. Charlsie concludes with tips for consumers to regain control, such as using incognito browsing and price tracking tools.

20:07

📈 Navigating the Complexities of Online Pricing

In this paragraph, Charlsie presents a chart illustrating the fluctuating prices of a webcam on Amazon over the past year, emphasizing the unpredictability of online pricing. The discussion centers on the emotional impact of such price changes on consumers, who may feel cheated if they paid a higher price for the same product. The script wraps up with strategies for consumers to better understand and navigate dynamic pricing, including using incognito mode to avoid personalized pricing and employing price tracking tools to monitor and alert them to price drops.

Keywords

💡Price Discrimination

Price discrimination refers to the practice where retailers charge different customers different prices for the same product or service, often based on personal data or consumer behavior. In the video, this concept is central as it explores how online retailers use personal information to charge varying prices, affecting the fairness and transparency of online shopping experiences. For example, the script mentions that different shoppers are charged different prices for the same product without any apparent discount or loyalty program.

💡Personal Data

Personal data encompasses any information that can be used to identify or track an individual, including browsing history, purchase behavior, and demographic details. The video discusses how online retailers leverage personal data to engage in price discrimination, tailoring prices to individual consumers based on what they might be willing to pay. The script illustrates this with the scenario where shoppers are tracked through cookies to determine their price sensitivity and shopping habits.

💡Cookies

In the context of the video, cookies are small files that websites place on a user's device to remember their preferences and browsing history. They are used for targeted advertising and to track consumer behavior online, which in turn can influence the prices displayed to them. The script demonstrates this with an example where a user's interest in towels on a shopping site leads to targeted ads for the same product when they visit a news site.

💡Incognito Mode

Incognito mode is a private browsing option in web browsers that prevents the browser from storing the user's browsing history, cookies, and site data. The video script highlights the use of incognito mode to test whether prices differ when browsing without the influence of saved cookies and browsing history. It is used to determine if online retailers are offering different prices based on a user's digital footprint.

💡Online Shopping

Online shopping is the process of buying goods or services over the internet. The video focuses on the dynamics of online shopping, particularly the issue of price discrimination and how it affects consumers. The script discusses the frequency of online shopping among Canadians and their attitudes towards the transparency of online pricing practices.

💡E-commerce

E-commerce refers to the buying and selling of goods or services using the internet, as well as the transfer of money and data to execute these transactions. The video delves into the complexities of e-commerce pricing, especially the use of algorithms and consumer data to set prices dynamically. The script mentions travel bookings as a significant component of e-commerce and explores how prices can vary significantly on e-commerce platforms.

💡Surge Pricing

Surge pricing is a pricing strategy where prices are increased during periods of high demand, often seen in ride-sharing services like Uber. The video script uses surge pricing as an example of dynamic pricing in action, highlighting how prices can fluctuate based on supply and demand, and the potential for consumers to feel unfairly treated if they pay more than others.

💡Dynamic Pricing

Dynamic pricing is a strategy used by retailers to adjust prices in real-time based on various factors such as demand, competition, and consumer behavior. The video script discusses how Amazon, as the largest e-commerce site, changes its prices millions of times a day for different items, reflecting the complexity and variability of dynamic pricing in the online marketplace.

💡Price Tracking

Price tracking involves monitoring the price of a product or service over time to identify trends, fluctuations, and optimal purchase times. The video script mentions the use of price tracking tools as a strategy for consumers to stay informed about price changes and get alerts when prices drop, providing an example of how consumers can navigate dynamic pricing.

💡Transparency

Transparency in the context of the video refers to the openness and clarity with which online companies share information about their pricing practices and the use of customer data. The script reveals that a significant majority of Canadians believe that online companies should be more transparent about the data they collect and how it influences pricing, reflecting a desire for fairness and understanding in online shopping.

💡Privacy

Privacy in the video script is discussed in the context of consumer data and the potential invasion of privacy that occurs when personal information is collected and used for pricing purposes. The script raises concerns about the tracking of online shopping habits without consumers' knowledge and the implications this has for privacy in the digital age.

Highlights

Online retailers are charging different customers different prices for the same product based on personal data.

Price discrimination allows retailers to charge more for desired items or less for undecided purchases to influence buying decisions.

Shoppers' willingness to share personal information for better prices varies, with privacy concerns raised.

Online retailers track digital footprints through cookies, influencing the ads and prices shoppers see.

A demonstration of price differences for the same hotel room across various browsing methods and devices.

The term 'steering' refers to how websites display search results based on customers' profiles and spending habits.

Expedia's explanation for price differences includes customers being tagged as U.S. or Canadian, affecting prices.

Priceline showed significant differences in hotel and car rental prices based on browsing methods.

Consumer behavior influences the prices offered, with past haggling tendencies potentially leading to better deals.

88% of Canadians want more transparency from online companies regarding the use of their customer data.

Amazon changes prices millions of times a day, taking into account various factors like popularity and seasonality.

Price tracking tools can help consumers monitor and get alerts for price drops on products.

Incognito browsing can reveal different prices not influenced by a user's browsing history.

Deleting third-party cookies can help users see unaltered prices and receive fewer targeted ads.

Consumers feel it is unfair for their spending habits to be tracked without their control or knowledge.

The importance of using different platforms and technologies to find the best price is emphasized by the testers.

Transcripts

[ ♪♪ ]

>> Charlsie: Attention online shoppers.

The Black Friday special you can't afford to miss.

On your Marketplace.

[ ♪♪ ]

>> Charlsie: Imagine this.

Three shoppers at the same store,

at the same time, buying the same product.

At the checkout, the first shopper is charged $5.

But the next shopper pays just $3.

And the last one, just $2.

No one was using coupons or loyalty points,

so what's up?

If it doesn't seem fair, tell that to the internet.

Our shoppers are about to hit the web to help us investigate

an emerging trend in online sales.

Retailers charging different customers different prices for

the same product, all based on your personal data.

>> I'm Ali Minton and I rarely shop online.

>> I'm Grant Leclerc.

I regularly shop online and I look for the best deals.

>> I'm Nadia Rashwan.

I almost only shop online.

>> Charlsie: Okay, c'mon in everybody.

Grab a seat.

Welcome, welcome.

Our expert is Jesse Hirsh.

A tech guru who says price discrimination is a way for

online retailers to make more money.

>> This is about information.

The more information they have on an individual, the more they

can prey upon your needs or your desires to charge

you something more for something you really want,

and maybe charge you something less for something

you're on the fence about,

as a way to persuade you to make that purchase.

>> Charlsie: So the bottom line, you could be getting charged a

different price for the same product.

I want to ask you guys, are you willing to kind of give up some

of your personal information if it means you're going to get a

better price?

>> Maybe in some instances but not overall.

>> Is it specifically for that transaction?

Is it for other purchases, do they sell it?

>> I am a private person and I like to protect my information.

>> Charlsie: So, how do online retailers track your

digital footprints?

What kind of shopper you are?

The websites you go to?

Cookie anyone?

A computer cookie is a small file websites can place on your

computer or smartphone.

It allows them to pick up certain information while you

surf the web, so they can target you with ads.

For instance, I'm on wayfair.ca.

I'm gonna go shopping for new towels and I come

across these blue ones and I like 'em.

But I'm not ready to buy them just yet.

Now I'm going to go check out the latest news and when

I get here, guess what?

Wayfair is here too.

Now they're not the only ones doing this,

but it's an example of cookies in action.

Retailers can also use this information to judge what you're

willing to pay for something.

>> Charlsie: All right.

So you've all brought with you a laptop,

you've also brought a cell phone,

and that means you've also brought with you all of your

online personal history, so that's good news for us today

because that's exactly what we want to test out.

We're gonna have you look up hotel rooms,

even a couple of rental cars, we want you each to look at the

same city for the same dates.

The question is, will you get the same price?

Can you guys plug in and hook up for us, please?

[ ♪♪ ]

>> Charlsie: On their laptops, each of our shoppers opens a

regular browsing window.

And then another one where you've gone incognito.

That allows them to browse the web in private.

And then we've also asked you guys to open up another regular

browsing window on your cellphone

because evidence suggests prices on those devices

could be different.

First up, we're gonna go to Travelocity.

Search for Panama City, Panama, November 15th,

checking out on November 24th.

All right, so everybody's all set.

Your screens are loaded.

On your marks, get set, search!

[ ♪♪ ]

>> Charlsie: Travel bookings are one of the biggest components

of e-commerce.

>> Let all your travel worries drift away...

>> Charlsie: Travel giant, Expedia, owns several sites

like Travelocity which is known for its gnome

and its promise of low rates.

>> Wander wisely...

>> Charlsie: As we pour over the results,

some other ones to share as well.

A Marketplace survey of the habits and attitudes of

online shoppers.

We asked about 2,000 Canadians and found nearly half

shop online at least once a month.

About three-in-four of us compare prices before buying.

Half of us have also booked a hotel room online.

We're at travelocity.ca.

It's travel we're booking back at our pricing test.

Hotel rooms on Travelocity.

The first thing we notice across our nine windows is not

everyone's getting the same results.

What was the first one that came up for you?

>> They're different in different browsers.

>> Charlsie: That's known as "steering".

Websites display search results in an order that's based on what

they know about you and your spending habits.

You've got Aloft Panama as your first and what was the first one

that you got in incognito?

Country Inn Suites.

>> It's significant...it indicates the difference in

price points of what each individual's perceived as

being able to afford.

So it does speak to a certain level of customization.

>> Charlsie: On your marks, get set, search!

We're now searching for hotels in London,

but so far, barely a blip.

>> I got $2 off on my cell phone versus the

web browser, incognito.

>> Charlsie: Oh, so you got $282 on your cell phone,

$280 on incognito, and $280 on your desktop.

>> I got the difference as well and the cell phone was $2 more

than on the laptop.

>> Charlsie: Our team ran a pre-test of Travelocity

beforehand and found several examples of different prices for

the same room.

In one case, $144 versus $154.

$181 versus $200.

$270 versus $278 a night.

Imagine a week.

So you guys have fresh windows open.

We switch to a different site.

Now what we want you to do is go to Priceline and we're going

to test out another city.

>> Just go to Priceline.

They add new thousands of new deals everyday,

up to 60% off.

Priceline became the world's largest online travel company

with guarantees of the lowest price on everything you book.

>> We even dated the same guy.

>> Who?!

>> Charlsie: This time we're going to have you search for

Orlando and you're going over March break.

The best time to be in Florida, right?

Take me to Florida, hit search.

Anything jump out at you right away?

>> So on a regular browser the Radisson Hotel in Orlando is

$124 as compared to incognito is $198 for the same.

>> Charlsie: That's a pretty big difference.

>> Big difference.

>> Charlsie: Is that the biggest so far?

>> That I've seen.

>> Charlsie: This time it seems to pay for Grant to show

his cookies but it's hard to know when and where it applies.

For instance, does it apply to car rentals on Priceline?

Now I'm going to ask you guys to add a car rental into

this search.

What did you get?

>> Both of mine were exactly the same.

>> Charlsie: But Grant notices something immediately.

A mid-size rental for $61 incognito.

It's just $53 in his regular browser.

>> I have in the past been very focused on getting and

driving the car price down on websites,

so I'm wondering if it knows that I'm a bargain shopper and

that's why I'm getting the discount.

>> Charlsie: Is he onto something, Jesse?

>> Absolutely, I think Grant's past consumer behaviour has very

much influenced, they know that he haggles they know he's

looking for a deal and they're trying to close that deal as

quickly as possible.

>> Charlsie: Haggling is more often found at street vendors

like this.

So this one's $20.

Can I give you $10?

In the war between buyers and sellers,

it used to be the only way to go.

>> $15.

>> Charlsie: $15?

Is that the lowest you can go?

You won't take $10?

>> No, $15.

>> Charlsie: But when the fixed price was invented,

a truce was called.

These days, though, the truce is over and technology

is the new weapon, as we're finding out in our test of

online travel sites.

>> It inflates the regular price from $567 to $572.

>> If you think about it from a negotiating position,

the provider is actually haggling with us.

They're showing us different prices and yet we don't have the

opportunity to negotiate back and I think that would be

possible if we knew their logic, if we knew what time of day

was better, if we knew of gender or age or geography

made a difference.

These are factors that I think should be disclosed.

>> Charlsie: That's what Canadians think too.

We'd like to know what's going on on the other side of

the screen.

88% say online companies should be more transparent about

the customer data they collect, use, or share.

Maybe because only 18% believe we have control over

what marketers know about us online.

>> Charlsie: Next stop, Seattle.

To one of the world's biggest travel companies.

So what do you say to the Canadians,

including our testers, who got different prices for

the same thing?

>> I say that they should keep shopping around.

>> Charlsie: This is your Marketplace.

>> Charlsie: The pricing game on your Marketplace.

>> Charlsie: We're testing online travel sites,

uncovering numerous examples of different prices for the same

hotel room on the same site at the same time.

>> Grant is getting a far greater substantial discount

than Ali is getting.

>> Charlsie: Could it be price discrimination?

Our survey shows Canadians are concerned about companies

offering different prices to different customers based on our

online shopping habits.

72% are concerned about companies tracking those habits

without us knowing.

66% don't know how to prevent it.

>> The best dot com for booking hotels is hotels.com.

>> Charlsie: For our final test we're at hotels.com and though

you can't tell from the ads, it's also owned by Expedia.

>> All those words are spelled correctly.

>> Charlsie: Let's try New Year's Eve in New York City.

As we search on, the results are raising suspicion.

Oh, my gosh.

$734 for the Belvedere.

>> Versus $712 for the Belvedere.

>> Charlsie: Oh, so there you go, you got $712 for

the Belvedere, Ali.

>> And even the original price is different.

>> Charlsie: So you got-- what does yours say, Ali,

for the original price there?

>> $918 and $896.

>> Charlsie: That's a pretty big difference.

New Year's Eve in New York is clearly a pricey affair many of

us can't afford.

But even if you can, you might wanna look twice,

especially on your phone.

>> Another one I found was the Highline Hotel on the computer

it's $675, and it's $655 showing the same base starting price.

>> Charlsie: Nadia and Ali also see a price difference for the

Highline Hotel.

Cheaper on their phones and incognito than in a

regular browser.

But you have to wonder, why?

[ ♪♪ ]

>> Charlsie: So we book some travel of our own and go looking

for answers in Seattle.

>> How are you doing?

>> Charlsie: So do you make these yourself?

You do?

We wanna know why there's so many price discrepancies from

one person to the next.

One browser to the other.

Even on different devices.

What does Expedia actually mean?

>> So what it means is speed plus encyclopedia.

>> Charlsie: We're at the world headquarters for Expedia,

whose brands include Travelocity and hotels.com.

>> About 600 million people come to our sites every month.

>> Charlsie: Sarah Gavin is their VP of communications.

We've already shared our test results with her.

>> You guys gave us enough information that we were able to

completely retrace the steps for what these customers did.

>> Charlsie: Gavin offers a surprising explanation for the

price differences uncovered by our testers.

>> They went to the hotels.com site first,

which is our U.S. site.

So they got tagged as a U.S. customer and then,

in their incognito browser, they went to hotels.ca first.

So even though on the first one they went back to hotels.ca,

they were still a US customer, as far as our

site was concerned, and our hoteliers were concerned.

>> Charlsie: So open up a new incognito window and we're going

to go to hotels.com now.

Here's what Expedia is saying.

When our testers opened a browser and typed in hotels.com,

the actual name of the company, they were taken to

its American site.

>> Ali, your left window there is actually the U.S.

rather than Canada.

There you go.

>> Charlsie: So it's ca.hotels.com.

So they clicked on the site's Canadian flag,

and were taken to the Canadian site.

But Expedia's system still viewed our testers as American

and showed them different prices,

though in Canadian dollars.

Bottom line?

Price discrimination.

So is this the way that the site is supposed to be working?

>> Absolutely.

In the incognito example, the incognito traveler was seen

as a Canadian traveler and the other traveler was seen as a

U.S. traveler, and there's absolutely different deals

to be had.

>> Charlsie: So you agree then that giving different

people different prices is exactly what you do.

>> We love giving great deals to customers,

and if that means that they're travelling internationally,

if that means that they're on mobile,

if that means that they're booking as a package,

if that means that they're a member, absolutely.

>> Charlsie: And that is price discrimination.

>> Our customers tell us it's awesome.

>> Charlsie: It's awesome.

Awesome, maybe, but not very transparent.

Or in keeping with the company's motto.

If the motto is the best price guarantee,

why does it matter if I'm shopping incognito,

or on a regular browser?

Why are the prices any different at all?

If it's just supposed to be the best price, guaranteed?

>> They're not going to be different if you're a

Canadian customer.

>> Charlsie: Tell that to our testers who are Canadian and

got different prices and had no idea why.

>> Big difference between the incognito price tends to

be higher for all the cars.

>> Charlsie: As for Priceline, the site where we found

differences in hotel and rental car prices, it says,

[ ♪♪ ]

>> Charlsie: So how widespread is this kind of

price discrimination?

In the off-line world, like at this movie theatre,

seniors pay less.

That's a form of price discrimination.

But it's transparent and it's a discount that's available

to many people.

Online, how do we even know when it's happening?

[ ♪♪ ]

>> I actually did all my Christmas shopping online

last year.

>> Charlsie: You did?!

Every single thing.

>> Charlsie: Doug Stephens warns, these new ways

of pricing, there's more coming.

>> The whole world is basically changing.

The entire world of retail.

Everything.

All of the conditions that gave rise to the retail we see around

us today are completely unravelling.

>> Charlsie: Doug is a retail futurist and advises some of the

biggest names in the business.

He says personal prices make a lot of sense for retailers.

>> If we step back even 20 years ago when your only choice as a

retailer was to pick a price and put it on the product,

you were doing two things, you were either selling too low

to consumers who might have paid more for the item or you

were turning consumers away who didn't want to pay that much.

So retailers are always trying to get the optimal price

for a product.

The difference is now they can.

Now they can actually use technology to do that.

>> Charlsie: We show you how to game the system.

Plus, price tracking on Amazon.

>> Well, that's crazy.

>> It is unfair.

>> You'd feel ripped off.

>> Charlsie: This is your Marketplace.

Write to us...

>> Charlsie: The real deal on your Marketplace.

[ ♪♪ ]

>> Charlsie: Need more proof online pricing is all over

the map?

Just hop in a Uber when it is rush hour or after the bars

get out.

Suddenly, a ride that normally costs $10 is now $15.

Uber calls it surge pricing.

[ ♪♪ ]

>> Charlsie: And lots of others are doing it too.

Take Amazon, for example.

It is the biggest e-commerce site going.

61% of people we asked shop on Amazon.

But many are surprised to hear it too uses surge pricing.

>> Amazon is actually changing its price is millions of times a

day across just about every item on the site.

>> Charlsie: That is going to be huge news to people.

>> Yeah, and Amazon is doing this because they're taking into

a wide variety of different considerations.

What is the popularity of that item?

What are the seasonal factors that may be affecting the price

of that item?

What are the competitive factors?

They put all of that together into these algorithms that are

constantly sort of hashing out these different prices.

>> Charlsie: In fact, Amazon's prices fluctuate so

often it is like a guessing game.

[ ♪♪ ]

>> Charlsie: You guys want to play a guessing game with us?

So we thought we would play one using this webcam.

So you've seen one of these things before?

>> Yeah.

Wait, what is that, is it a webcam?

>> It is a webcam.

>> From like 1998?

>> Charlsie: I want you to tell me how much you think

that costs.

$60, $80 or $120?

>> Online?

>> Charlsie: Yep.

>> I'm going to go with $80.

>> $80.

>> Charlsie: What do you think?

>> I mean I would never spend $100.

$60.

>> Charlsie: $60?

>> Yeah.

>> Charlsie: What if I made it easy for you guys?

It actually costs all three of those prices.

>> That doesn't make it easier.

That makes it more confusing

>> Charlsie: To clear up the confusion we bring out a chart

from a site that tracks prices on Amazon.

This is actually a chart of what this webcam costs over

the last year.

>> Oh, wow.

>> Charlsie: Do you see how it goes up and down like that?

>> Oh, yeah.

>> Yeah.

How interesting.

>> Charlsie: Bottoms out over here $60 and then it went up

to $80, and then the highest price is $120.

>> Wow.

>> Charlsie: Yeah.

And then look at this.

This is just the last couple of weeks.

Okay?

So here it was.

October 15th, just $60, and then they are you go,

in just a matter of weeks, almost a 50% increase.

>> Wow.

That's crazy.

>> Charlsie: Same webcam, different price.

How would you feel if you're the guy that paid $120 and somebody

else got it for $60?

>> Right. You would feel ripped off.

>> Charlsie: Prices have always been a mystery.

But who really knows what something should cost?

But it's even more so with things like dynamic pricing

and price discrimination.

So, here are some tips on gaming a system that is trying

to game you.

[ ♪♪ ]

>> Charlsie: Go incognito.

Look at products using a private browsing window to see if the

price is higher or lower in that mode,

free of your history.

Or you can also delete your third-party cookies if you want

to see prices unaltered by your history along with fewer

targeted ads.

Use price tracking tools to watch prices and get alerts

when prices drop.

As for our testers, they have their own take away.

>> It is not fair that our spending habits,

our buying habits are being tracked.

>> You are only one way bartering and that is

kind of unfair.

Being able to set the parameters of what they can see,

then at least you've got some control back in your hands.

>> I need to be a bit more diligent and using

different platforms, technology to really find the

best price.

>> Charlsie: Especially when prices might cost you

your privacy.

[ ♪♪ ]

>> Travel nightmares.

>> We got delayed about three times before they decided to

cancel our flight.

>> Lost luggage.

>> Customer service hell.

What are your flight rates?

>> They did not seem to care it all.

>> We're chasing the people with power.

>> If an airline isn't fined when they break the rules,

then why should they follow the rules?

[ ♪♪ ]