E-commerce has gained immense popularity in the past decade. It is a suitable way for customers to purchase items from the comfort of their homes. The rise has been dramatic for the last couple of years, especially during the COVID-19 pandemic.
It’s speculated that the growth of e-commerce is unstoppable, and it will cover more market percentage in coming years.
However, one issue that some users battle is price discrimination. Price discrimination is charging different prices for the same product or service based on specific users’ attributes.
In the past, we have seen attempts to charge Apple users more than those entering online stores via Windows devices. Recently, we have noticed a crackdown on such practices. However, users can still be exposed to such trends until further actions are taken.
For now, we have a way for you to battle location-based discrimination, which essentially means that prices adapt according to visitors’ whereabouts.
Read also: Why do E-Commerce industries need E-Commerce website designing?
What is price discrimination?
The meaning of price discrimination in layman is e-commerce websites offer the same products at different prices to different buyers. It makes us think that this may be due to the variation in delivery charges according to location.
But there’s a catch here! The courier charges are not the primary factor in this case. The key factors are targeting customers based on cookies, purchase history, and IP addresses. Price discrimination is basically based on personalized ad technology. The companies have borrowed the concept, tweaked it a bit, and applied it to target potential customers who can pay more.
Now, the buyers who live in an affluent locality end up paying more for the products than those who live in modest locations.
Of course, not all providers will implement price discrimination. However, there are plenty of examples that do.
Why do Companies enact this?
There are various reasons why companies practice price discrimination.
- To maximize profits. When companies can charge different prices for the same product or service, they can maximize their earnings depending on the location.
- To increase market share. Another reason could be to increase market share in a particular region or country. By lowering prices in areas with stiff competition, companies can make it difficult for their competitors to sell in those regions and gain an advantage.
- To cover costs. In some cases, companies may need to charge higher prices in specific locations to wrap the costs of doing business in those regions. For example, if the cost of shipping products to a particular region is higher than the average, companies may need to increase prices in that region to cover those costs
How can you avoid it?
There are several ways you can avoid being targeted by e-commerce price discrimination.
Use a Virtual Proxy Network
One way is to download VPN applications for masking your IP address. A VPN encrypts your traffic and hides your IP address, making it difficult for companies to track your activity and charge you different prices based on your location. Thus, you can manipulate which location gets associated with you. Thanks to easy IP-masking, you can try different areas before purchasing goods online.
Shop on websites that don’t use cookies
Finally, another way to avoid price discrimination is to shop on websites that don’t use cookies. E-commerce companies use cookies to track your activity and charge you different prices based on your location. If you shop on websites that don’t use cookies, you’ll be less likely to be targeted by price discrimination. The best option is private browsers that automatically block things like third-party cookies. For instance, Mozilla has blocked them by default since 2019.
Clear cookies before placing orders
Some e-commerce stores use cookies to track your purchase history and show you relevant ads. If you don’t want to be overcharged for items, delete all the cookies before purchasing. You can go to the browser settings and clear all the cookies.
Use Incognito Mode
Chrome, Firefox, and Opera all have incognito modes, stopping the browser from saving your browsing history and cookies. This is an effective option if you only want to buy one item and don’t want the company to track your purchase history.
Pay Attention to Prices
Finally, always pay attention to prices when shopping online. Sometimes, companies will list different prices for the same product on different pages. Make sure you’re comparing bananas to bananas before making a purchase.
Conclusion
Price discrimination is a strategy of charging different prices for the same product or service, depending on the customer’s location. It is a bitter reality, but there are ways you can avoid being overcharged. The tips mentioned above can help you in avoiding it. Remember always to be vigilant and informed when shopping online.
