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Dynamic pricing: Internet retailers are treating us like foreign tourists in Egypt

More online merchants are launching 'dynamic pricing' schemes, which adjust prices based on perceived willingness to pay. But just as foreign tourists in Egypt grow tired of being overcharged based on looks, consumers may well object to being singled out based on their Web habits.

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Fewer things frustrate tourists in Egypt more than skin-dependent pricing. Have Irish freckles? Expect to pay double in a Cairo taxi. An Italian tan? The price of that basalt model of the Sphinx just shot up 200 percent. Have glowing blue eyes? Some restaurants suddenly have no menus and prices are delivered orally. I’ve been overcharged by more merchants in this country than I can tally in Excel.

Overcharging people based on their features makes them mad. Indeed, there’s some evidence that Egypt’s relentless retail harassment costs the country big, as some beleaguered tourists are reluctant to return. Turkey, a country roughly the same size as Egypt but one that is a bit more forthright with sightseers, hosts nearly twice as many visitors as Egypt every year.

It’s a lesson that online businesses would be wise to heed. In a bid to boost profits, more online merchants are launching “dynamic pricing” schemes (euphemistic for “pricing based on how much we think we can bleed you”), which adjust prices for online goods and services based on perceived willingness to pay.

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“Online customers are more fickle than their brick and mortar brethren, more likely to window shop…and much less loyal to any particular store,” said Brooke Gladstone on NPR’s “On the Media.” “Retailers have tried to level the playing field with some digital tricks, among them ‘dynamic pricing’…changing the price of a good based on what they think a consumer is willing to pay.”

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