Dynamic pricing based on market supply and demand has long been a fixture of modern retail. However, major companies are now exploring technologies that alter prices based on individual consumer profile data.
On the latest episode of Business Trends Today, we’re joined with Patent Attorney and Nova Southeastern University Adjunct Professor Jon Rizvi to examine the legal and ethical implications of “surveillance pricing.”
Decoupling retail costs from supply and demand
Unlike traditional dynamic pricing, which reacts to broad market trends, surveillance pricing calculates individualized price tags using personal data, behavioral tracking, and purchasing histories.
"Walmart now could monitor the speed at which a shopper's shopping cart is moving, and based on that, determine whether they're price shopping or if they're just in a hurry and need what they need. And that's troubling. Like, if you're in a hurry, you just wanna go in, grab a bunch of items. Are you really going to look at the price and pay attention to the brand, or are you gonna pick the first thing you see?"
Rizvi pointed to recent retail patents, such as Walmart filings, that show how tracking technology could operate in physical stores. A smart shopping cart equipped with handle sensors measures a customer’s heart rate, pulse, and movement speed. By assessing how fast a shopper navigates the aisles, algorithmic systems can determine whether an individual is carefully price-shopping or in a hurry, adjusting real-time digital shelf displays accordingly.
In-cart checkouts and complementary product markups
Combining digital price tags with in-cart checkout technology eliminates traditional front-of-store registers, removing price transparency among shoppers. Under proposed patented workflows, pricing algorithms can also analyze complementary product pairings in real time.
“The patent itself talks about complementary products, so if you buy hot dogs, they know you have hot dogs purchased because it’s in your cart. Automatically, the price of buns can go up,” Rizvi noted.Â
Similar mechanisms exist across digital apps, where tracking metrics like “acceptance rate”, the percentage of times a user completes a purchase after viewing a quote, let algorithms identify price-insensitive consumers and raise baseline rates.
Legal protections and federal oversight gaps
While corporate representatives clarify that obtaining a patent does not obligate a company to deploy the technology, filing secures proprietary rights and prevents competitors from monopolizing the software.
To curb predatory practices, states like Maryland, New Jersey, and Connecticut have enacted legislation prohibiting companies from using personal data or real-time tracking to set individualized prices on essential consumer goods. However, outside of specific state actions or emergency price-gouging statutes during declared disasters, federal law currently places few restrictions on personalized retail pricing strategies.
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