Editor’s note: The magic of dynamic pricing and why I get home sooner now

December 11, 2011

The other day Amazon greeted me with a different kind of offer.

I could have my gift delivered in two days for “free,” or if I was willing to let the package travel via old-fashioned snail mail I could get $1 off a future digital music download.

I took the dollar off.

Amazon had to be happy. It saved on shipping costs and gave me an incentive to come back. Plus, it had already hit my credit card for my annual $79 “prime” membership, which entitled me to a year’s worth of two-day shipping. I had just agreed to skip something I already had paid for.

It still felt like a win-win to me. I really didn’t need that gift until Christmas, and I knew I would be buying music soon. (In fact, I cashed in the voucher a day later).

That got me thinking. I’m fascinated by all the ways retailers coax one transaction from another.

My billfold bulges with frequent shopper cards. My inbox is clogged with e-mails reminding me how many points I’ve accumulated at this hotel or that airline. Even my favorite soccer store has me checking back for when I will qualify for a free pair of shoes or goalkeeping gloves.

It doesn’t stop there. A discount as small as a few pennies on the gallon has got me carrying a wad of $20s so I can buy gas at the cheaper cash-only rate.

Price influences behavior. Why else would I obsess over those machines at the cashier that ask whether the card I just swiped is credit or debit? It’s the same piece of plastic, but I only had to get hit once with a $1 surcharge to see the benefit of entering “credit.” Or is it debit? I can never keep that straight.

Dynamic pricing is everywhere.

For months now, I have silently stewed at how long it took the local parking attendants to fetch my car.

Until I doubled my nightly tip.

Now they run down the ramp.

Dan Beyers is the founding editor of Capital Business, The Washington Post’s go-to source for news about the region’s business community.
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