I-TEAM: AI, algorithms may be cheating you out of the best deals online
Wednesday, Oct. 23, 2019
News 12 at 6 O’Clock
AUGUSTA, GA (WRDW/WAGT) – When we shop online, we all want the best deal.
It’s why we all do one last Google search for a coupon code. Sometimes we get lucky. Sometimes we don’t.
Our I-Team found there might be another secret code at work when it comes to pricing.
It's called price discrimination, and chances are it's happened to you. You just don't know it.
Here's how it works: you find something you want to buy, and then you see a price. What you *don't* see are algorithms using things like the time of day and your location. They also zero in on you, looking at your search history or what type of computer you're using.
If you're shopping on your phone, they know that, too. They actually know a lot more about you than you might realize. So our I-Team went shopping to see what all this could mean for your wallet.
While we're not face-to-face with an actual person when we shop online, that doesn't mean the internet isn't personal. Ever wondered why search engines like Google know you're looking for an Apple product and not an actual apple?
It's the same reason Netflix can recommend a movie you might like. E-commerce personalization can be very helpful, but the Consumer Education Foundation warns it can be hurtful, too. It can be so hurtful that it sent an "urgent request" to the FTC about "secret surveillance scoring."
The nonprofit believes "these practices violate federal laws." So our I-Team did a little practice shopping.
Here was our list: a drill from Home Depot, a TV from Walmart, a hotel stay in Atlanta via Travelocity, a pillow from Sears, and a mirror from Wayfair.
Ten of us at News 12 put the prices to the test -- all going to the same websites and getting different results. The biggest discrepancy came with the mirror from Wayfair. From my desktop computer, I got a price of $47.57, but my phone gave me a price more than $5 cheaper at $42.24.
Dakota Watson's price was $54.74 on his phone.
"I don't know why you get to pay less for the mirror than I get to pay. So, don't see how that's fair,” Watson said. “Makes me question things."
The most expensive came on Hannah Treece's computer screen at $58.24.
"Well, just on one thing. So let's say I have that significant of a difference on everything I'm purchasing. That really adds up,” Treece said.
She also reported the highest price for the TV at Walmart.
For a Dec. 20 stay at the Four seasons in Atlanta, the cheapest I could find was $260 a night. Treece could have booked a room for $244.
The Home Depot drill was about the same for everyone, though for some it was $49 even, while others had an extra 99 cents tacked on.
The only item where we all got the same price was the Sears pillow.
"These are just -- what, 5 products? So imagine every product you ever looked for, whether you're shopping for Christmas or just any kind of gift or just something around the house,” Watson said.
Our results are not all that different from a study by Northeastern University, even though their sample size was a lot bigger than our little shopping trip. Of the 16 online retailers and travel sites they tested, customers found different results and/or prices on nine of them. And
The buck might not just stop at pricing.
According to that letter sent to the FTC, secret surveillance could also lead to discriminatory customer service where algorithms help companies provide "better support to companies they consider more valuable."
The group also warned scores could trickle beyond buying power and be used to "deny people housing" and to "deny people jobs."
And then, there's this -- secret surveillance is, well, secret. That means you can't know your score or even how it's calculated.
It essentially leaves your money at the mercy of a math problem you aren't allowed to check.
So what can you do to guard your very real bank account from possible issues with artificial intelligence? Shop around and not just between websites. If you use a desktop, check it on a phone and vice versa.
Also, you've probably heard making your browser go incognito can help. It actually hurt me when looking up plane tickets. The same flight on the same airline on the same day was actually $54 cheaper, so secret surveillance isn't always a bad thing.
Sometimes it can be good for your wallet, too.
Something important to remember is that a lot of places have price match guarantees. So if you see a cheaper price, you can get a refund for the difference.
There are also shopping apps that pay you for your data. Some are as simple as uploading a grocery receipt.
This one pays you by points you accumulate just by walking in a store. You get more if you buy certain items, but I'm almost at the $5 mark, and I haven't actually made any purchases on any of the featured items. It's like getting paid to tell the app where you shop. I figure our smart phones already gather this type of data anyway, I might as well benefit from it as well.