NEW JERSEY — As inflation continues to challenge everyday Americans, New Jersey Gov. Mikie Sherrill is pledging to ban a controversial policy where stores offer different prices to different people.
It’s called surveillance pricing, and it gives companies the ability to use consumer data and behavior to determine pricing.
Businesses gather information on customers like their demographics, shopping habits and browsing data — and then they charge the highest price they believe an individual will pay. That price can vary from person to person.
Pharmacists explained on Wednesday how the practice has driven up the costs of some prescriptions.
“They’re shifting payments to pharmacies, lowering the reimbursement, based on what they think your cost is, which is usually not accurate, and they use AI, they use algorithms to drive this to maximize their profit while lowering the amount the pharmacy gets while maximizing what patients pay out of pocket,” said Dr. Alan Oustaev, COO of Invictus Pharmacy.
It comes down to personal information you may have shared online or through apps or other shopping incentive programs.
“We’re not talking about high-end products that people have disposable income to buy, we’re talking about food, we’re talking about personal items,” said NJ State Sen. Joe Lagana.
Sherrill said that means if the store knows you just searched for a certain product online, it might charge a higher price.
On Wednesday, she explained why she thinks a ban is necessary for families in the Garden State.
“I’m trying to not use bad language here, but it’s creepy AF…I’m sorry but the fact that I could click on something online and then go into a store and they’re gonna charge me more because I looked at it is sketchy,” Sherrill said. “The thing that really struck me as a working mom is I’m always sliding into the grocery store as quickly as I can, between work and getting somebody to some soccer practice or something, and that’s the busiest time and that’s when they jack up costs the most. So if you’re working and you don’t have time to go to the grocery store at the slow times… it’s like you get double punished — it’s the worst time to go, everybody’s there, you’re standing in long lines and getting charged more money.”
Montclair State University Professor Dr. Manveer Mann said government regulation is one way to control surveillance pricing, but there are tools at home as well.
“You can disable cookies on your browsers; now there are various browsers on the marketplace that protect consumer data,” Mann said.
Sherrill said she plans to work with lawmakers to put regulations in place to make sure customers are not taken advantage of. She said she will go after everything from the software that interprets the AI algorithms to the retailers who utilize the targeted pricing.
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