Consumer News: Walmart rules out personalized pricing as digital shelf labels spread

The retailer says its new technology will not be used to charge shoppers according to what it thinks they can afford

By Mark Huffman of ConsumerAffairs

• Walmart says it will not use a shoppers income, purchase history, or perceived willingness to pay to set a personalized price.

• The pledge also covers its AI shopping assistant and rules out changing prices based on the time of day.

• Rival retailers may face more questions about how they use customer data, though Walmarts decision does not set a rule for the industry.

Walmart is drawing a line around how it uses customer information: It says it will not charge one shopper more than another because of who they are, what they have bought before, or how urgently they need an item.

We price the product, not the person, CEO John Furner wrote in a letter to customers. He said Walmart does not set different prices based on a shoppers identity or the time of day and will not do so in the future.

The statement comes as Walmart expands digital shelf labels, which replace paper price tags and can be updated electronically. Some shoppers have worried that the technology could make it easier to change prices rapidly. Furner said Walmart uses the labels to help shelf prices match checkout prices and to save employees the time spent replacing paper tags.

Walmart's pledge also puts it in line with laws in four states. Maryland, Connecticut, New Jersey, and New York have passed or enacted state-level legislation addressing or banning surveillance or personalized pricing.

The pledge extends to Sparky, Walmarts AI shopping assistant. Furner said information customers share with the tool will not be used to raise their prices or hide less expensive products that meet their needs. He said employees will continue to oversee pricing and the company will test its technology against those commitments.

What changes for shoppers?

Walmarts promise does not mean prices will stay fixed. Furner said they can rise when merchandise or transportation costs increase and fall when the company can pass along savings. The distinction is that Walmart says it will not adjust a price for an individual shopper based on personal information or an estimate of what that person might pay.

That gives customers a clearer answer to a question raised by increasingly sophisticated shopping apps and pricing systems: Could sharing more information with a retailer cause them to be charged more? Walmart says the answer at its stores and shopping tools is no.

Shoppers should still compare prices among retailers and check that a shelf price matches the amount charged at checkout. Walmarts commitment addresses how it sets prices; it is not a guarantee that every item will be cheapest there.

Pressure on competitors

Walmarts announcement could put pressure on competing grocers and big-box chains to explain their own pricing practices, particularly as they adopt digital labels and AI shopping tools. That is a potential competitive effect, not an indication that those retailers are using personalized pricing.

The issue is also drawing federal attention. The Federal Trade Commission (FTC) has proposed an enforcement policy statement warning that businesses could violate consumer protection law if they use personal data to set prices without clearly telling shoppers. The agency says it lacks authority to ban personalized pricing in every circumstance.

For competitors, Walmart has made price transparency part of its pitch to shoppers. Rivals may now have to decide whether to make equally explicit promises or explain why their approach differs.