Surveillance Pricing: The AI That Decides What You Pay

You know that feeling when you’re shopping and you’re pretty sure you’re getting ripped off, but you can’t quite prove it?

Turns out, you might be right.

Last September, Consumer Reports (the nonprofit that tests products and investigates marketplace practices) ran an experiment. They recruited 437 volunteers across the country and had them all shop for the exact same groceries on Instacart at the exact same time from the exact same stores.

The results? Three out of four products were priced differently depending on who was shopping. A box of Clif Bars cost one person $19.43 and another person $21.99. Skippy peanut butter (I prefer chunky) ranged from $2.99 to $3.69. Some shoppers paid $114 for a basket of 20 items while others paid $124 for the exact same stuff ^[1].

Different prices. Same groceries. All based on what Instacart’s algorithm decided each person would pay.

When Consumer Reports published their findings in December 2025, Instacart stopped doing it ^[1]. They knew how bad it looked. I guess they were just betting nobody would notice.

And this isn’t an Instacart problem. There’s an entire industry built around it. The FTC released a study in January 2025 calling it surveillance pricing ^[2]. At least 250 companies are already using these systems. We’re talking grocery stores, pharmacies, airlines, and retail chains ^[2].

The price you see isn’t what everyone else sees. The algorithm is making a calculation about you specifically.

So how did retailers go from fixed price tags to personalized pricing based on your data? That’s exactly what we’re looking at today. Come along, it’ll be an upsetting (yet kind of fascinating) ride.

From Fixed Prices to “How Much Are You Willing to Pay?”

Before the 1870s, if you wanted to buy something, you haggled. The price was whatever you could negotiate. Walk into a general store in 1870, and the shopkeeper would size you up and decide what to charge you based on how you looked, how you talked, on whether you seemed desperate (or you kinda rubbed them the wrong way).

Then in 1871, John Wanamaker introduced something radical at his Philadelphia clothing store: he put fixed price tags on everything ^[3]. Same item, same price. No negotiation. The “one-price system,” he called it. By the early 1900s, fixed pricing had become the standard.

That lasted about a century.