Question: Is it legal for airline websites to increase prices on future visits?

Hi, My family took our first trip to Disney in December 2012 (which turned out to be great). We booked our flight with JetBlue and I discovered something by accident that really does not sit well with me.

If you pick your flights and times online at the JetBlue site and then close your browser and re-open again, the price of the flight increases. For us that was about $100 more. Now, if you clear out the history and the cookies and close the browser then re-open again...magically.... the rates go back down to the original rate. I tried this on two other computers and achieved the same results.

That to me is a very deceptive business practice! I have not tried this with other airlines but I suspect it is a common practice. Is this legal?

Thank you,
Greg

Response:

Hi Greg:

Smart of you to notice this price change as most consumers are unaware that online retailers regularly employ "dynamic pricing" tactics like this to improve and optimize their sales. Some ecommerce websites including Amazon.com will play with the price of almost everything they sell, shifting prices up and down based on buying habits and trends sometimes multiple times a day.

We did an experiment at Marketplace.org during the holiday shopping season and tracked the daily price of five popular gifts. One of the items we tracked -- a Start Wars DVD set -- went from $70 to $135 in two days! You gotta feel bad for the guy who did his holiday shopping a few days late. Our reporter Stacey Vanek Smith followed up with a story to explain how these dynamic pricing systems work.

One thing to note is that these systems don't always work against consumers. Wharton Business School released a report that explains these systems can actually be beneficial to customers. They also answered your question of lawfulness: "not all pricing strategies are permissible. Collusion by competitors in an industry to fix prices violates the law, as does the use of race or gender to target customers for different prices or other discriminatory treatment."

Moral of the story, delete your cookies before you e-buy!

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Thanks for referencing stories you had already done on dynamic pricing, but you made one goof. If you reference a story, put in a link. Stacey Vanek Smith did an excellent piece and it would be a real service to her to steer us back to it for a second listen.
Hi MWade: Turns out the links are there, but there's a display bug on the site that's preventing them from looking like links! We'll get that fixed promptly. In the meantime, here's a link to the story: http://www.marketplace.org/topics/business/brave-new-world-dynamic-pricing
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