Target app raises prices when you walk into a store

After a KARE 11 investigation, Target says it’s changing its app to make clear that the price displayed for an item is different depending on whether you buy it in the store or buy it online.

But it still doesn’t quite explain the practice of why the retailer was increasing prices the closer you got to the store. [Update: Target says it doesn’t.]

KARE says its investigation started after a viewer bought an electric razor for $100, the noticed it went to $70 on the app when she got back to her car.

The station tested 10 items and found four of them went up in price when entering the store.

The goal appears to be to show you a lower price on the app to get you to go to the store to buy it, then charge you more once you’re committed to buying it. Why anyone is driving around looking at a shopping app is another story, but apparently people are doing that.

Target says its app will now be more clear when displaying prices, indicating whether they are online or in-store prices.

But Target says it will still change the displayed prices when people walk into the store, according to KARE.

  • asiljoy

    So they figured out that large retailers price things differently at different stores and online?

    Looks like the app defaults to give you the price of the online item unless you’re actually in a store/on their wi-fi; in that case, it gives you the price of the item at that time in that store. Which just seems accurate? I dunno, having a hard time getting angsty about this one.

    • digital bait and switch

      • asiljoy

        Yep, got that it’s how they’re trying to frame it. As a user of the app, it already seemed pretty clear that you were getting a price based on where you were/how you were trying to order; for example, it let’s you change stores in the app so you can check the prices at different locations. I mean, greater clarity is fantastic and I’m all for it, but I’m gonna leave my pitch fork in the closet until the next time they decide to name a color scheme for plus size women after a walrus/the next article on how children are making 80% of the clothes in their supply chain.

      • Sonny T

        You are correct:

        Minnesota | Truth In Advertising
        “Aug 7, 2011 – Here’s a snapshot of Minnesota’s laws regarding deceptive advertising: Minnesota Statutes § 325D.44 : Lists a number of acts that are deemed unfair or deceptive trade practices, including, but not limited to, advertising goods or services with the intent not to sell them as advertised.”

        • AL287

          Are rent price ranges on a website covered under the law?

          If it is, I have a bone to chew with my apartment management company.

    • Leroy

      A while back I decided to buy a game, and after looking at different places online noticed that Target was selling it for a decent price. Rather than waiting a few days for it to be shipped I decided to just drive over to my local Target. Once I got there I found they were selling it for a higher price than they were offering online.

      After showing the cashier the online price they matched it in the store. I’m guessing that is the thing they are trying to curb.

      • Jack Ungerleider

        I had a similar experience with an inexpensive (ok, cheap) point and shoot camera I needed for a project I was working on. I went to the web site and found a camera for $17.99. So I stopped at the store one my way past and it was $24.99 in the store. I was willing to pay $18 for the camera not so sure about $25, I walked out. A few days later I went back and found it was still marked $25. So thinking maybe a sale tag was missing I took to a price check kiosk, sure enough it was 24.99. So I took it back and one of the friendly team members in the tech department asked if I had a question. So I asked why the web site (which was up on my phone) had a different price than the store? I was told that they are different business units but that the store will price match. They Tech team member turned me over to someone else to check me out and he asked “where did you see the lower price?” I said “your website.” “Oh,, that makes it easy.”

        I suspect the app is smarter than the web site. Use your browser to check the online price. They almost lost a sale because of this, but I suspect they don’t loose too many or they’d go to consistent pricing.

        • So Target will match Target’s price, but only if you notice they’re charging two different prices. That seems….ah never mind.

  • BReynolds33

    I spent 17 years in the hell that is retail. Let me walk you through why this was a thing.

    Target, most likely, has their .com, their app, and their stores functioning as different business units. This puts the three of them in a sort of competition with each other, if only for internal resources. They all have their own set of buyers, who all have their own set of relationships with the companies they buy goods from.

    So, a .com buyer (or, in this case, the app) makes a deal with a company to have a sale on an item. That sales is only good on the .com, not in store or on the app. Same can happen in store or on the app (I’m not sure if they tested store prices being lower than in the app or not).

    So, the price is lower for item X online. The customer, not being stupid, checks the price online and sees it is lower. They order for pickup at their local store. Now, the store business unit has done all of the work. They managed a relationship, negotiated the price, bought the product, imported it, shipped it, stocked it, pulled it, processed the sale, and delivered it, and the .com business unit gets credit for the sale.

    Now, the store BU leaders say, “Uh… no. Get that price out of my store.” So, the app team, and the .com geo fence the price around the stores.

    The internal turf battle is settled, and the customer loses.

    Please note: I am not a Target employee, nor have I ever been. I have no idea if this is Target’s model, or if they really were just being a major corporation looking to milk every dollar out of a customer. I’m basing this on the practices of the 5 retailers I worked for. Only one (Home Depot) had a policy that credited all online sales to a local store. One other had a policy that split the sale between the two BUs.

    • what if you order it online but pick it up at the store? Which price is charged?

      • BReynolds33

        Before Target made this change? The online price. Now, the store gets their price. Which, for the most part, would drive customers simply to buy it at the store, since they don’t have to wait.

        When they were changing the price, you could get the online price at home, but you had to go get it at the store. In which case, most people likely simply default to the free delivery.

        • BReynolds33

          Well… now it is back to getting the online price. To be clear.

        • So theoretically, two people walk into the same Target store at exactly the same time, buy exactly the same product, but are charged two different prices?

          Sure, that makes sense.

          • Brian Simon

            Some would call that the free market. Both consumers are choosing to engage in the transaction, and are free to shop elsewhere, use the app, not buy the product, etc.

            Personally I agree its shady, but is unsurprising when dealing with large corporate entities.

  • Gary F

    I think this is probably more widespread than we believe. With the power of retailers to track our web history, buying history at that store, and location, more of this game playing goes on.

    Happens all the time for online shopping.

    • John O.

      See “Tickets – Airline” for a prime example of this approach.

      • Gary F

        Orbitz does it all the time

      • Renae

        Yup. Was looking for a new TV show to binge and saw that Modern Family season 1 was only $5. Having gone down this road before, I double-checked and seasons 2-9 were also only $5 for the whole season. Okay good, I can afford to get addicted. So I purchased season one and suddenly the rest of the seasons were all $50. I’m now back to buying DVD sets!

  • tboom

    I worked at the Mother Ship (corporate office) for nearly a decade. It may be a locally based nationally known Fortune 500 corporation, which gives Minnesotans a warm feeling, but in the end it’s just another corporation willing to push thel limits in an endless effort to boost profits.

  • Jim in RF

    I wouldn’t have thought this would be news to people, but I guess it says something about KARE’s target demographic. It happens pretty routinely, even at retailing dinosaurs like Tractor Supply.

    • // it says something about KARE’s target demographic.

      My kingdom for someone who can make an intelligent argument without resorting to this nonsense.

      • Jim in RF

        Seriously, Bob. How many people under 35 watch TV news? And how many under 35 don’t know about dynamic pricing? I think the two walk hand in hand.

        • This isn’t dynamic pricing, which is based on demand — the Twins charging more for the Yankees or the airlines selling a ticket to Las Vegas in the winter.

          Dynamic pricing would be Target charging more for walkway salt today than it did last week.

          This is a case of telling people the price is one thing, and then being charged a different price when you go to buy it.

          That’s not dynamic pricing; that’s being misleading.

          • Jim in RF

            No. Dynamic pricing is the umbrella term, and includes surge pricing, value-pricing, and a bunch of other ways that prices change based on circumstances. It’s not just uber charging more when there’s heavy demand. Besides, my point wasn’t about the definition of a marketing term; it was that the olds who still watch TV news are surprised to hear that prices aren’t fixed any more, and younger people hear the story and say “well duh…”

          • All of that sort of pricing is based on demand. That’s not what this situation is about.

            So your point is that old people are stupid or clueless. Got it. Very insightful stuff there.

          • JamieHX

            “[T]he olds”?? Wow, that’s respectful.

  • Karl Crabkiller

    A few years ago Best Buy was “caught” running a separate web site in their stores that had higher prices than their external web store.

  • Rob

    As long as the app clearly – and in sufficiently large, upfront print – states that the noted price is online only and not valid for in-store purchase, I don’t see the problem. If however, the situation is less transparent and arguably akin to bait and switch, a visit from the state’s Attorney General office seems merited.

  • Brian Simon

    I, for one, am [not] shocked!

    @onan, cue the inspector!

  • JamieHX

    There’s something else nefarious that Target does that I’ve thought about asking KARE 11 to investigate: when I place an order online and then go to the store to pick it up, the gift “cards” I earn (they’re electronic, sent by e-mail) for volume purchases and for buying certain groups of products show up as CHARGES on my credit card statement. It’s happened to me 3 times. When I call them about it, someone with a heavy accent says something like “oh, that’s just the way we do it” or “how we keep track of it — you’re not really being charged.”
    But I WAS being charged. I’ve had VISA remove the charges for one time ( two $5 and one $10) and will be calling about the other two times (a total of $40 more). It’s a time-consuming hassle to contest charges in this way, but I’m not paying for my gift cards!
    Since I first reported this to Target way back in August, they certainly must know that it’s happening. I think they’re doing this on purpose, expecting at least SOME people to not bother with checking out what’s going on with these mystery charges on their statements.

  • boB from WA

    Another reason why I have very few apps on my phone. And half of them came with the phone, that I never use (Garage band? Really?).

  • Postal Customer

    The lesson here is that people need to turn off location services. That is the gateway to so much bad behaviour by these corporations.