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Consumer Discontent

Dynamic pricing is not without hazards. If done incorrectly, dynamic pricing strategies can cause consumers to feel cheated—especially if they can easily perceive that the same product is being sold at the same time at different prices.

Frequently-changing pricing is subject to misinterpretation by the general consumer. Too often, the logic used by some companies to set prices baffles and even angers the very consumers they're trying to attract. For example, you walk into your favorite computer store and buy a state-of-the-art computer system for $3,500. The following week, you're in the same store to buy some software, and you see the system you bought last week selling for $2,000! Nothing brings on buyer's remorse faster than the realization that you've paid more than you had to.

You might detect one of the tricky pricing policies that some companies use on the Internet today:

  • Creating a fake price and giving a fake discount.
  • Raising the price to match the competitor's, even if the competitor added more bells and whistles to his product.
  • Raising the price without changing the product, and marketing it as "new" or "improved.
  • Charging more to buy more. Take a product with an uneven price, say $2.69, and put a big sign over it that says, "Special! 2 for $5.75." (Do the math.)
  • The ever-popular charging extra for mandatory parts. The automotive industry loves this one. Set a low price for a car, and then charge extra for the wheels. I jest, sort of, but here's a real-life example. My father, who is quite the skinflint, brought his car in to have its wheels balanced. The charge was $29.95 to balance the wheels and $.75 cents per lead weight to balance the wheels. My dad saw through the scam and said, "That's OK. Just balance the wheels without the weights."
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