How Companies Use AI to Make You Spend More Money

Artificial intelligence is changing how companies set prices, market products and influence consumer spending. From grocery stores and online retailers to airlines, hotels and ride-sharing services, businesses are increasingly using sophisticated algorithms to analyze consumer behavior, predict demand and determine how much customers may be willing to pay.

While companies have long used pricing strategies to maximize profits, artificial intelligence is making those strategies faster, more targeted and increasingly difficult for consumers to recognize. The technology can analyze enormous amounts of information, allowing businesses to adjust prices, personalize offers and identify opportunities to increase revenue.

At a time when Americans are already dealing with higher living expenses, the growing use of AI-powered pricing systems is raising questions about transparency, fairness and whether consumers are paying different prices for the same products and services.

What Is AI-Powered Pricing?

AI-powered pricing uses artificial intelligence, machine learning and data analytics to help businesses determine how much to charge for products and services. Instead of relying solely on traditional pricing strategies, companies can use software to analyze purchasing patterns, competitor prices, customer demand, inventory levels and market conditions.

These systems can process information much faster than human pricing teams. They can identify when customers are more likely to make a purchase, which products are gaining popularity and how much prices can change before consumers decide not to buy.

Some systems also help businesses determine which customers should receive discounts, which products should appear first in search results and what promotions are most likely to encourage another purchase.

Not every AI pricing system charges individual customers different prices. Some simply help companies make broader pricing decisions based on market conditions.

Surveillance Pricing Raises Concerns About Consumer Privacy

One of the most controversial developments is known as surveillance pricing, also called personalized pricing.

This practice involves using information about consumers to determine what prices or promotions they see. Depending on the system, information could include a person’s geographic location, browsing history, shopping habits, demographics and previous purchases.

For example, a retailer could potentially use shopping history to identify customers who regularly purchase certain products and tailor promotions accordingly. Other systems could identify consumers who appear less sensitive to price increases.

Federal regulators have raised concerns about how companies and third-party pricing firms collect and use this information. A Federal Trade Commission staff report published in January 2025 examined how businesses could use detailed consumer information, including location, browsing behavior and shopping history, to help tailor prices and promotions.

The findings demonstrated how personal information could potentially influence what consumers are offered and how much they pay. However, the report did not establish that every retailer was charging individual customers different prices.

Grocery Stores Are Embracing Digital Price Tags

Grocery stores are among the businesses attracting attention as retailers introduce electronic shelf labels.

These digital displays allow stores to change prices electronically without replacing traditional paper tags. Retailers say the technology can reduce labor costs, make price updates more efficient and help employees spend less time changing labels.

However, the technology has also raised concerns about whether grocery stores could eventually use digital displays to change prices throughout the day based on demand.

For consumers already struggling with grocery bills, the possibility of prices changing more frequently has generated understandable frustration.

It is important to distinguish between the technology itself and how businesses use it. Electronic shelf labels do not automatically mean a store is charging different shoppers different prices. The broader concern is that digital pricing systems make it easier for retailers to adjust prices quickly.

Airlines, Uber and Retailers Already Use Dynamic Pricing

Dynamic pricing is not new. Airlines, hotels and ride-sharing companies have used variations of the strategy for years.

Airlines frequently adjust ticket prices based on demand, remaining seats, booking patterns and how close a flight is to departure. Hotels also adjust room rates depending on occupancy, travel seasons and local demand.

Uber uses surge pricing when demand for rides exceeds the available supply of drivers. During major events, severe weather or rush hour, customers may see substantially higher fares.

Artificial intelligence can make these systems more sophisticated by analyzing larger amounts of information and predicting how customers might respond to different prices.

Retailers are increasingly exploring similar tools to determine which products should cost more, when discounts should be offered and how to maximize revenue without losing customers.

The technology can work in both directions. Algorithms may recommend lowering prices to attract shoppers, clear excess inventory or compete with another retailer. The controversy centers on how these systems are designed and whether consumer information is being used to extract more money from individual customers.

McDonald’s AI Pricing Strategy Draws Attention

The fast-food industry is also becoming part of the growing conversation about algorithmic pricing.

McDonald’s has been expanding its use of an AI-powered pricing system designed to help franchise owners determine menu prices. The technology analyzes transactions and considers factors such as local demand, operating costs, competitor prices and customer purchasing behavior.

The system provides pricing recommendations intended to help restaurants improve revenue and make more informed decisions.

However, the strategy has raised questions about how much influence corporate pricing recommendations have over independently operated franchise locations.

McDonald’s franchisees maintain authority over their individual menu prices. The broader issue highlights how AI can give companies unprecedented insight into consumer demand and help businesses identify opportunities to increase revenue.

Federal Regulators Are Investigating AI-Powered Pricing

The growing use of artificial intelligence in pricing has attracted attention from federal regulators.

The Federal Trade Commission has been examining how companies use personal information in pricing and compensation decisions.

The agency has investigated practices involving consumer data, browsing habits, loyalty program participation and other information that could influence how much customers pay for products and services.

The investigation also examines whether ride-sharing and food-delivery companies use personal information to determine how much workers are paid.

These inquiries reflect growing concerns about whether consumers and workers understand how algorithms influence financial decisions.

Importantly, an investigation does not establish that a company has violated consumer protection laws or engaged in illegal pricing practices.

How Consumers Can Protect Themselves

As companies collect more information about shopping habits and online activity, consumers may have fewer ways of knowing exactly how pricing decisions are made.

There are several practical steps shoppers can take to become more informed about their purchases.

  • Compare prices: Check multiple retailers before purchasing, particularly for expensive products and travel reservations.

  • Check prices across devices: Comparing prices through different browsers or devices can help identify differences, although it does not establish whether personalized pricing is occurring.

  • Review loyalty programs: Understand what information retailers collect when you sign up for rewards programs.

  • Limit unnecessary data sharing: Review privacy settings and avoid providing personal information that is not required for a purchase.

  • Watch for changing prices: Take note of price fluctuations before completing an online transaction.

Consumers should also remember that a changing price does not automatically mean a company is using personal information to target them. Supply, demand, inventory and competition remain major factors in pricing decisions.

AI Could Change How Americans Pay for Everyday Products

Artificial intelligence is becoming an increasingly important part of the modern economy, and pricing is one of the areas where its influence is becoming more visible.

For businesses, the technology offers opportunities to improve efficiency, understand customers and increase profitability. For consumers, however, it creates questions about transparency, privacy and whether companies are using personal information to determine how much they can get away with charging.

The biggest concern is not simply that prices change. It is that consumers may have little understanding of why a price changes, what information influenced that decision or whether another customer received a better deal.

As regulators investigate these practices and more retailers adopt AI-assisted pricing systems, the debate over who benefits from the technology is likely to intensify.

Ultimately, consumers deserve transparent pricing and the ability to understand when their personal information is influencing what they pay.