Why AI could end the price tag as we know it

The humble price tag has long served as a common measure of value for consumers. Now, experts warn that artificial intelligence could allow retailers to charge people different prices based on their personal data. 

Lindsay Owens, CEO of Groundwork Collaborative, a nonprofit think tank focused on economic policy, said AI threatens to upend universal prices for consumers. That could overturn norms that have been in place since the 1860s, when pioneering retailer John Wanamaker introduced fixed prices in his Philadelphia department store. 

"The posted price has been paramount for consumers, and I do think the price tag is at risk of extinction," Owens, a consumer protection expert and author of "Gouged: The End of a Fair Price — and What That Means for Your Wallet," told CBS News. "Predictability is really essential if you're on a budget, and knowing how much something is going to cost from one week to the next is part of what the posted price offered."

A price tag just for you

AI-enabled pricing builds on so-called dynamic pricing, which companies have used for decades to adjust prices in response to shifting patterns of supply and demand, weather, time of day and other factors. 

Firms aren't stopping there, however. Today, retailers are starting to test new ways of pricing goods based on who you are, where you live and myriad other insights gleaned from AI — an approach known informally as personalized or "surveillance" pricing, Owens said. AI also gives companies a powerful new tool to continually analyze vast amounts of disparate data to gain insights into consumer behavior. 

"These technologies may empower firms to collect, process and analyze vast amounts of consumer data, leading to more granular, dynamic, and individualized pricing than previously observed," analysts with economic consulting firm Cornerstone Research said in a 2025 report. 

The upshot: Retailers could use AI to tap the vast amounts of consumer data they already collect to set prices not on a product's value, but rather on the maximum amount they believe an individual shopper is willing to pay, Owens said. 

Currently, this Uber-style pricing typically fluctuates based on, say, the number of drivers and passenger demand in a given market. But with AI, companies could also harness your consumer profile to set what amounts to a personalized price, Owens said. The result could amount to a form of AI-enabled haggling, in which consumers face perpetually shifting prices based on factors largely invisible to them. 

"Technology is allowing companies to stop setting prices for products and start setting prices for you," she said.

A sign of prices to come?

In December, Groundwork Collaborative and Consumer Reports reported on a trial by grocery-shopping platform Instacart that used AI to simultaneously show customers different prices for the same goods from the same store. The pilot built on Instacart's 2022 purchase of Eversight, a software platform designed to enable AI pricing.

The AI-enabled tech runs experiments by setting different prices for different consumers and collecting insights into how people respond, including when they proceed with a purchase and when they walk away. The investigation found that grocery baskets containing identical items cost up to 23% more for some shoppers. That could translate into a swing of about $1,200 per year for a family of four, Groundwork and Consumer Reports concluded.

Instacart disputes the report's findings, telling CBS News that the $1,200 price gap among some shoppers reflects an "atypical" grocery basket with the greatest possible price difference for every item. The company also said it doesn't use consumers' personal data, including federally protected characteristics such as race or gender, to set prices.

In December, however, Instacart said it would stop using AI to let retailers charge customers different prices for identical items on its platform.

According to Owens, other companies have also begun experimenting with using AI to charge consumers individualized prices based on their personal data, such as their online browsing habits, income level, ZIP code or family structure. 

In separate Groundwork research released this month, the group said that Walmart had applied for patents on technology that would allow the retailer to compile comprehensive shopper profiles and use them to set individualized prices. The tech, such as electronic shelf labels, could be used to charge consumers a "different price than the customer in front of them in the checkout line," Owens and her co-author wrote. 

One patent application indicates that Walmart has already developed technology to adjust prices based on items in a shopper's cart, according to Groundwork. "If a customer has tuna fish, they may be offered a different price for mayonnaise," the group claimed.

Walmart denies developing tools that would allow it to use customers' personal data or other factors to adjust prices. 

"Walmart does not and will not use an individual customer's personal information, income, shopping history, urgency or willingness to pay to set an individualized price," Dan Bartlett, Walmart's executive vice president of corporate affairs, said in a public letter to Owens this month in response to her research. "We do not engage in dynamic pricing, raising prices in response to a hot afternoon or an approaching snowstorm, for example."

Jay Zagorsky, a senior lecturer at Boston University's Questrom School of Business, has also warned about the potential risks of using AI for personalized pricing, noting that businesses are unlikely to disclose such practices for fear of facing consumer backlash. 

"Nothing positive is gained by a merchant stating they are doing this," he told CBS News, while expressing his belief that retailers are developing the tools to set individualized pricing. "The days when the price you saw stayed fixed for a relatively long period of time appear to have passed."