FTC Warns Businesses Against Using Personalized Pricing

The Federal Trade Commission (FTC) is cracking down on 'personalized pricing'—the practice of using a customer's personal data to change the price they see. For retailers and service providers, this means the tools you use to target offers could soon face heavy legal scrutiny. The FTC is worried that businesses are using browsing history, credit scores, and location data to charge different people different amounts for the same product. This is particularly relevant for businesses that offer financing or lease-to-own options, as the total cost of ownership often fluctuates based on the consumer's perceived ability to pay. If you use AI-driven software to dynamic-price your inventory or financing terms, you need to be careful. The regulators are looking for 'unfair or deceptive acts' that hide the true cost of a product until the very end of a transaction. The FTC’s move suggests that transparency is becoming the new legal standard. Retailers should audit their digital platforms to ensure that two different customers aren't seeing wildly different prices for the same SKU based on their data profiles. Even if your intent isn't predatory, the appearance of price discrimination can lead to costly enforcement actions or reputation damage.

Source: PYMNTS

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