Picture this. You walk into a vintage store and ask how much for an attractive navy blazer. The store-owner looks you up and down and, with a dry smile, says, “For you, £200”.

Why £200? Why, “For you”? If you had said, acted, or were dressed differently, would you have been charged more? Less?

This is an example of personalised pricing, and it seems fairly uncouth. But online retailers have been accused of experimenting with just such pricing policies.

Are they right to do so?  

Of course, e-tailers regularly tap personal data to tailor promotions and offers to particular consumers. And this seems okay, since it works in our – the consumers’ – favour.

But using that very same data, companies could also raise their prices depending on who the potential customer is. And, for many, paying more than somebody else based on your level of interest, geographic location, and demographic credentials just seems unfair.

Amazon, for example, tracks your purchase history and personal information in order to find out your interests and how much you are willing to pay for a particular product. It then uses this information to suggest recommendations. However the company has also experimented with using that information to tailor prices (though CEO Jeff Bezos later called the experiment a “mistake”.)

Similarly, travel site Orbitz Worldwide, Inc. took advantage of the fact that Mac owners spend up to 30 percent more on hotel rooms than PC users by customising search results to Mac users that prioritised more expensive options. 

And this is not a surprise – the practice makes a lot of sense from the companies’ point of view.

There will, of course, be individuals who are willing to pay more for a particular product or service; and there will also be consumers who are only ready to buy if the prices comes down a little (or, in some cases, a lot!): personalised pricing allows companies to generate more revenue by shifting how they assess and meet demand from the general to the particular.

In a way, companies are simply obeying, and more accurately than ever before, the Law of Supply and Demand – and what’s wrong with that?

And let’s not forget, personalised pricing could actually work in our favour.

Actually some think that the major upshot of personalised pricing would be a reduction in prices for most affected consumers, since, with many consumers weighing up their options before making a purchase with price comparison sites and the like, a discount will often be more cost-effective than a price hike.

The truth is, no one is really sure to what extent companies are pursuing personalised pricing, and it’s debatable whether they are right or wrong (legally and morally) to do so.

Do you think the personalised pricing is fair? And who do you suspect is doing it?

Email me your thoughts.