MICHEL MARTIN, HOST:
OK. So you've walked into a grocery store, and instead of paying a fixed price for, say, a loaf of bread, you pay based on where you live, what you've searched for online or what you've bought in the past. That's called surveillance pricing, and Maryland is expected to become the first state to ban the practice for groceries. Here to explain is Grace Gedye, a senior policy analyst at Consumer Reports. Good morning, Grace.
GRACE GEDYE: Good morning.
MARTIN: Grace, you know what? I just went through this. I was trying to buy a ticket. I couldn't finish the transaction because I had to run in the studio and do an interview. And when I came back, the price had jumped 30%. I was so annoyed. So explain how the surveillance pricing works, and how are companies using it right now.
GEDYE: Yeah. I mean, the experience you had is, I think, an experience so many of us have these days, where prices are changing, and we're like, what's going on here? And it's very reasonable to kind of have a suspicion because there's this whole infrastructure online now - particularly online shopping - where, you know, companies are tracking your every move online, your search history, you know, where your device is in the world, what you hover over, what you put in your cart, and all that information says quite a lot about who you are, what your interests are. And then, you know, they can use it to change the price you see based on what they think you might be personally willing to pay.
MARTIN: Well, you know, people, I think, already are accustomed to or are aware of the fact that there can be different prices for the same thing. For example, companies use coupons or discounts for groups like students or seniors to charge different prices. They also track spending habits through, you know, loyalty programs. Is this different?
GEDYE: Yeah. So, I mean, I think, you know, coupons have existed for a long time. The difference now is, like, over the past several decades, the amount that companies know about each of us individually is just orders of magnitude more than they would've several decades ago. So, you know, in the era of everyone shopping in person, a retailer might know your recent purchases and maybe they know your address for delivery, and they have a sense of, you know, if that's an affluent neighborhood or not.
But now, you know, they have so much information collected about you based on what you're doing online, in addition to information that they can buy from other companies. You know, there's this whole ecosystem for buying consumers' data. So they just have a much more fine-grained sense of what is likely to work for you personally. Like, are you a comparison shopper? Are you susceptible to a flash sale? Are you someone who really needs a particular item and therefore might be likely to spend more on it? And then also with the type of discounts you mentioned - senior discounts, student discounts - there's a level of transparency there where people have a sense of...
MARTIN: OK.
GEDYE: ...Who gets it.
MARTIN: So we only have about a minute left. So what does Maryland's legislation do, and does Consumer Reports think it's a well-crafted bill and has a good - is a good idea?
GEDYE: Well, yeah. It's set out to be a bill to prohibit personalized pricing. Unfortunately, the version that came out of the legislature has some pretty serious exemptions and loopholes that make us concerned about how much of a real-world impact the bill will have. But it's aimed at personalized pricing in the sale of groceries.
MARTIN: Do you think the Trump administration is likely to pursue efforts - which did begin under the Biden administration - to protect consumers from surveillance pricing?
GEDYE: It remains to be seen. I mean, we've seen this Federal Trade Commission start a rulemaking around unfair and deceptive fees in food sales. So, you know, we will see how that progresses.
MARTIN: That is Consumer Reports' senior policy analyst, Grace Gedye. Grace, thank you.
GEDYE: Thank you.
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