By Retailist Team
Consider this, if you will. You’re surfing your favorite online shopping platform with a burning desire to purchase a much-needed home gadget or perhaps the latest trendy wear. You enthusiastically add your chosen products to your online shopping cart, only to experience a mini heart attack at checkout. You wonder, “But why the soaring prices?” Turns out, you might be a casualty of a hidden cost trap.
Welcome to an internet scheme running quietly behind those glossy product images promising unbeatable deals. In this article, we reveal how online shoppers often unknowingly add overpriced items to their carts and the intricate web spun to maintain the steady upward trajectory of the price tag.
The Invisible Hand Tweaking Your Cart
Unbeknownst to most online shoppers, high-priced items discreetly find their way into carts. The sneaky techniques that online platforms apply might seem out of a moderately thrilling espionage book; sadly, they are a reality.
Jason Adler, a Software Engineer at Repocket, says, “Many online shopping platforms engage in what we call ‘dynamic pricing.’ It’s a sophisticated strategy where prices change based on the buyer’s profile and behavior on the website.“ That’s right, the innocent bags you left hanging in your ‘saved items’ folder and your browsing history essentially serve as a gold mine for e-commerce platforms adjusting prices.
Some examples of dynamic pricing are:
- Uber and Lyft charge higher fares during peak hours or when the demand for rides is high.
- Airlines and hotels adjust their prices based on the season, the number of available seats or rooms, and the time until departure or check-in.
- Amazon and other online retailers change their prices based on the customer’s browsing history, location, and purchase patterns.
Dynamic pricing has some advantages and disadvantages for both businesses and consumers.
Some of the advantages are:
- It helps businesses optimize their revenue and profit by capturing the consumer’s willingness to pay.
- It allows businesses to respond quickly to changes in demand and supply and to compete effectively with other businesses.
- It benefits consumers who are flexible and willing to shop around for the best deals.
Some of the disadvantages are:
- It can alienate or frustrate consumers who feel they are being unfairly charged or discriminated against.
- It can create a lack of transparency and trust between businesses and consumers and lead to negative reviews or complaints.
- It can be difficult to implement and manage, as it requires sophisticated data and technology and constant monitoring of the market.
Inflated Prices Masquerading as Bargains
Although the internet’s beauty lies in its ability to compare prices readily, not all discounted prices you see translate to real savings. Adler warns, “In many instances, original prices are inflated a heavy percentage to portray a heightened sense of discount. In reality, actual discounts are significantly less than what the large, red figures suggest.“
Deceptive pricing, as defined by the FTC, encompasses any pricing strategy that is likely to mislead consumers, influencing their behavior or decisions regarding the products or services available for purchase. In essence, all forms of advertising, including pricing information, are obligated to convey accurate information and refrain from misleading consumers.
What’s more, some shoppers may not realize they are paying non-refundable, hidden additional charges for factors like express shipping, gift wrapping, or warranty extensions at checkout.
Time is Ticking: Protect Your Wallet
The price increment game has been around for as long as e-commerce itself. And it’s not slowing down. If anything, more sophisticated means at the digital marketer’s disposal amplify this trend. So, how can you defend yourself against this financial onslaught? Here are three effective habits:
- Erase your browsing history because it can contribute to recalibrating the dynamic pricing software.
- Compare actual totals with different sellers rather than just the advertised product prices to identify hidden charges.
- Use price comparison tools to cross-check prices on multiple platforms.
Adler concludes, “Being an informed consumer shields you from exploitative e-commerce practices.“ So the next time you shop online, remember: forewarned is forearmed.
As the landscape of online shopping continually evolves, so does its unwritten rulebook. Having read this, you can now make wiser, more aware online shopping decisions. Because in this digital age of hidden costs and dynamic pricing, the only commodity more valuable than your money is your awareness
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