Seattle City Council considers ban on grocery ‘surveillance pricing’
Seattle City Council floats grocery "surveillance pricing" ban
Are grocery stores gathering personal information on shoppers, so they can charge higher prices for customers who might pay more? Seattle City Councilmember Alexis Mercedes Rinck wants Seattle to ban "surveillance pricing" which is believed to do exactly that.
SEATTLE - A proposal to ban what critics call "surveillance pricing" is headed for a full Seattle City Council vote on Tuesday, sparking some debate on what it is and whether any grocery stores are actually doing it.
Sponsored by Council Member Alexis Mercedes Rinck, the proposed ordinance goes after surveillance pricing, which is the alleged practice of adjusting prices on an individual’s willingness or ability to pay.
What is surveillance pricing?
What they're saying:
"Building profiles on people from age, your income, where you live and what you search online, and then using that information to determine what is the most that person will pay," Rinck explained.
Rinck says the legislation is tailored to go after the largest grocery chains.
"It’s really the large grocers who have the capital available to invest millions of dollars in this kind of surveillance technology," Rinck said.
Rinck pointed to a Consumer Reports investigation where hundreds of volunteers shopped for identical grocery lists on Instacart and found varying prices for the same items. According to Rinck, that experiment included a Safeway in Seattle, where shoppers were shown different prices or reference prices for identical products.
The ordinance exempts smaller operations, ethnic markets, and local grocers such as Uwajimaya, PCC, and Grocery Outlet.
The other side:
However, grocery retailers and delivery platforms deny using surveillance pricing and argue the proposed ban could end up hurting consumers instead of protecting them.
Albertsons Companies, which owns Safeway, stated that it never uses customer data to inflate prices for individual shoppers.
"We use customer data responsibly to provide data-driven discounts, personalized offers, digital coupons, and loyalty program benefits that help customers save money on groceries," an Albertsons spokesperson said.
Instacart also pushed back against the claims, noting the Consumer Reports study cited by Rinck reflected randomized price testing — a practice the company says it has since ended — rather than personalized surveillance pricing.
"Instacart does not engage in surveillance pricing and, as we’ve repeatedly stated publicly, we never will," the company said in a statement. "We’ve made clear with Seattle policymakers that the current legislation threatens to eliminate discounts and promotions that many families rely on, particularly at a time when there are real concerns about affordability."
Will banning surveillance pricing mean fewer discounts?
Industry advocates worry that the threat of legal liability could force grocers to eliminate digital deals and loyalty rewards altogether.
The Washington Retail Association expressed concern over the regulatory burden and potential for litigation.
"WR has reached out to the mayor and council expressing our concerns with the cost of frivolous litigation and the regulatory burden that is included in the legislation," the association stated. "It’s this uncertainty that will disrupt the savings offers nearly every consumer relies on."
When asked for a specific list of grocery chains currently using surveillance pricing technology, Rinck acknowledged the difficulty in pinpointing specific operators.
"These systems are intentionally opaque; we cannot provide a complete list of every retailer using them," Rinck said.
Rinck also dismissed concerns that the legislation might lead grocers to scrap discount programs altogether, maintaining the legislation specifically addresses those issues.
"It protects ordinary public sales, manufacturer coupons, bulk discounts, employee discounts, student and veteran discounts, and loyalty prizes offered to all members," Rinck said.
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The Source: Information in this story comes from original reporting by FOX 13 anchor Hana Kim.