The Times of London recently reported the UK’s Office of Fair Trading is investigating the differential pricing tactics of online retailers. Differential pricing  typically involves retailers collecting information about their registered customers in order to determine a customer’s “willingness to pay” for a particular product or service. Based on that data the retailer may then charge certain customers more than others if the retailer believes the customer will still make the purchase at the higher price.

While the legality of such practices is unclear, (Amazon has been reported to do this as well) differential pricing leaves most consumers, at a minimum, with a bad taste in their mouth. A classic example of this was Coke’s plan to make vending machines that would charge different prices for sodas based on the ambient temperature, exploiting the idea that cold sodas are worth more to people when it’s warm outside. Unsurprisingly, many consumers did not take well to this and Coke abandoned the project.

For consumers, the most important issue here is likely transparency. If a website engages in differential pricing, consumers interacting with the site should be informed ex-ante – before they register or make a purchase. As it seems unlikely websites will do this voluntarily, it may be  up to governments and watchdog groups to bring website pricing practices to the fore. Here on Sitejabber, perhaps some of our community members can do a bit of investigative research and see if we can’t root out and let consumers know about some of the sites that practice price discrimination.