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Thursday, June 02, 2005

What website "cookies" get you

Excerpted from
Shoppers naive about retail prices online

Most American consumers don't realize Internet merchants sometimes charge different prices to different customers for the same products, according to a new survey.

The study found nearly two-thirds of adult Internet users believed incorrectly it was illegal to charge different people different prices, a practice retailers call "price customization."

The Internet empowers careful shoppers to conveniently compare prices and features across thousands of stores. But it also enables businesses to quietly collect detailed records about a customer's behavior and preferences and set prices accordingly.

Stores aggressively try to retain loyal customers who generate the highest sales while discouraging bargain-hunter shoppers who are less profitable because they check many sites for the same product at the lowest price. They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty.

First-time buyers at a retailer could see higher prices than a firm's repeat customers, and retailers may not offer discounts to consumers who buy the same brands regularly without even looking at alternative products on the same site.

Turow found a retail photography Web site charging different prices for the same digital cameras and related equipment depending on whether shoppers had previously visited popular price-comparison sites. outraged some customers in September 2000 after one buyer deleted the electronic tags on his computer that identified him as a regular customer and noticed the price of a DVD changed from $26.24 to $22.74.

The company said it was the result of a random price test and offered to refund buyers who paid the higher prices.

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At 12:24 PM, Blogger Lora said...

It never even dawned on my that they would or could do that. Thanks for pointing it out.

At 3:37 PM, Blogger kenju said...

Yes, thanks for pointing that out. I don't buy on the web anymore, but if I ever do, I will watch for this!

At 6:09 AM, Blogger RP said...

I never knew about that. That was quite interesting. Food for thought.

At 10:13 AM, Anonymous Anonymous said...

In-ter-est-ing. I never considered that my cookies could be thrown against me dynamically in one search. That's quite clever actually. Next in buyer-merchant warfare someone will make a macro and dumpable set of cookies to test a series of price checks from faked IP addresses so to find all the price selection choices.


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