Published 2026-02-08 by TechNet New England
When you shop online, the price you see might not be the same price your neighbor sees for the exact same product. Retailers are increasingly using sophisticated algorithms that analyze your personal data to determine how much you are willing to pay - and then charge you accordingly. This practice, known as dynamic pricing or surveillance pricing, is expanding rapidly and raising serious concerns about consumer privacy and fairness.
What the FTC Found
In January 2025, the Federal Trade Commission released findings from its surveillance pricing market study. The results were alarming: a wide range of personal data - including your precise location, demographic information, search history, and even your mouse movements on a webpage - is frequently used to set individualized prices for consumers.
The FTC study examined third-party intermediary firms that retailers hire to algorithmically set prices. These intermediaries work with at least 250 clients, including grocery stores and apparel retailers. The data they collect includes:
- Browsing history and search patterns
- Purchase history across multiple retailers
- Social media activity
- Precise geographic location
- Time spent on specific web pages
- Mouse pointer movements and speed
- Items left unpurchased in shopping carts
- Device type and browser information
The Spread of Digital Price Tags
The infrastructure for dynamic pricing in physical stores is expanding rapidly. Walmart announced it will add digital shelf labels to 2,300 stores by 2026. Kroger has used similar technology since 2018 and has expanded to 500 stores nationwide. Amazon Fresh and Whole Foods locations also use electronic shelf labels.
The global market for electronic shelf labels was estimated at $1.85 billion in 2024 and is projected to reach $7.54 billion by 2033, according to Grand View Research.
While retailers claim these digital tags are primarily for operational efficiency - allowing price changes that previously took two days to be completed in minutes - lawmakers and consumer advocates worry about the potential for abuse.
The Wendy's Wake-Up Call
In February 2024, fast-food chain Wendy's announced plans to invest in digital menu boards that would support "dynamic pricing." The backlash was immediate and severe. Critics accused Wendy's of planning to gouge consumers with surge pricing during peak hours. Burger King seized the moment, offering free Whoppers and posting "the only thing surging at BK is the fire."
Wendy's quickly backtracked, clarifying that it would "not implement surge pricing" and that any dynamic features would be used for discounts during slow periods rather than price increases during busy times. But the incident revealed how sensitive consumers are to the idea of prices changing based on demand - and how many companies are quietly exploring these capabilities.
Lawmakers Take Notice
The regulatory response is building. In 2025 alone, 24 different state legislatures introduced over 50 bills to regulate algorithmic pricing.
New York signed a law in May 2025 (effective November 2025) requiring retailers to disclose when they use algorithmic pricing. Violations can result in civil penalties of $1,000 per violation.
Senators Elizabeth Warren and Bob Casey wrote to Kroger expressing concern that electronic shelf labels could allow grocery chains to "surge grocery prices suddenly" at times when specific products are most in demand. They warned that widespread use of dynamic pricing would result in consumer goods being "priced like airline tickets."
The Real Cost to Consumers
Research published in the Journal of Political Economy found that total consumer surplus declines 23% under personalized pricing compared to uniform pricing. While the study noted that over 60% of consumers may see lower prices under personalization, the overall effect transfers wealth from consumers to retailers.
From the business perspective, the incentives are clear: one study found that optimal dynamic and targeted pricing strategies suggest a 52% improvement in profitability compared to standard pricing.
How Your Behavior Sets Your Price
The data collection is more extensive than most consumers realize:
- 76% of businesses use real-time behavioral data, such as tracking shoppers who linger on the checkout page
- 63% use individual user profile data from customer data platforms
- 62% use cookie-based data to differentiate new and returning visitors
- 68% use real-time behavioral decisioning for personalized content and pricing
Consider this scenario: if you buy the same cereal every week, an algorithm might recognize that pattern and quietly raise the price for you specifically, knowing you are likely to purchase regardless of a small increase.
How to Protect Yourself
While you cannot completely avoid algorithmic pricing, you can take steps to minimize its impact:
Use Private Browsing - But Know Its Limits
Incognito or private mode can prevent some tracking based on your browsing history, but its effectiveness has decreased. Modern tracking uses device fingerprinting - gathering details like screen resolution, operating system, browser version, and installed fonts - to identify users even in private mode.
Consider a VPN
Virtual Private Networks mask your IP address and location, which are primary inputs in many dynamic pricing algorithms. When shopping for travel, hotels, or major purchases, try connecting through servers in different regions to compare prices.
Clear Cookies Regularly
Instead of relying solely on incognito mode, manually clear your browser cookies between shopping sessions. This prevents platforms from using prior searches to estimate your willingness to pay.
Avoid Logging In Until Checkout
When you log into a retailer's website, they can access your complete purchase history to inform pricing. Browse anonymously and only log in when you are ready to complete your purchase.
Use Price Tracking Tools
Browser extensions like Honey, Rakuten, or CamelCamelCamel reveal price trends and history. These tools help you determine whether a "sale" is genuine or whether the price was artificially inflated before being "discounted."
Compare Across Devices and Platforms
Sometimes device type influences pricing. Check prices on both mobile and desktop, and compare across different browsers and retailers.
What This Means for Your Business
If you run a business, these same technologies and practices apply to your B2B purchases. Software subscriptions, office supplies, and business services may all be subject to algorithmic pricing based on your company's profile and behavior.
Understanding how dynamic pricing works helps you make more informed purchasing decisions - whether you are buying for yourself or your organization.
The Bottom Line
Dynamic pricing is not going away. The technology is becoming more sophisticated, and the financial incentives for retailers are significant. The best defense is awareness: understanding that the price you see may be personalized, taking steps to minimize tracking, and comparing prices across platforms before making significant purchases.
As one consumer advocacy expert noted, "It is still too early to see strong guardrails in place to protect consumers and their information." Until regulation catches up with technology, protecting your data is protecting your wallet.
Sources: Federal Trade Commission Surveillance Pricing Study (January 2025), CNBC Electronic Shelf Labels Report, Journal of Political Economy, Warren-Casey Letter to Kroger, New York Algorithmic Pricing Law, DemandSage Personalization Statistics 2026, AI Multiple Dynamic Pricing Research