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Using Algorithms Against You

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A lot of companies are using computer algorithms in an attempt to maximize the amount of money they make. It is important to pay attention to avoid being taken advantage of by these companies.

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A low-cost airline in Europe was recently found to have added into their seating algorithm a clause where they identified passengers with the same surname and purposely separated them. The airline was aware that families would pay more to sit together and attempted to exploit this by splitting them up and then charging them more to sit together. This way they could offer a low fare but get you to purchase add-ons. They were purposely making a situation where passengers were less comfortable in a hope that they would spend more money.

Many travel sites will only offer you the best price on your first visit. If you leave the site and come back, they no longer show you the lowest price. They do this to prevent you from shopping around. If you go and check several sites and come back you will no longer see the best fare, so next time you will be incentivized to book a good fare as soon as you see it and not shop around. A way to work around this is to use different browsers or use your browser’s incognito mode when you are browsing fares online.

Some large retailers use software which identifies the products in which customers pay close attention to the price. They lower the prices on the products where price is a factor, but raise the price on other products that you are likely to also buy when you are at the store. You show up to buy a discounted TV, but they charge you more for the accessories, HDMI cable, surge protector, mounting bracket etc. You wind up spending the same amount of money if you had bought the TV at another store where it was not on sale. It is important to pay attention to the total amount you spend. If you go to a store and get some great deals, but the total price winds up being the same, the store may be using this software that identifies the products that they can charge more for without you noticing that the price is high. The way to combat this is to pay attention to the total amount you are paying.

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Algorithms are being used to squeeze the most amount of money out of the consumer. It is important to be able recognize when this is happening. Probably the best way to do this is look at the total amount you are spending. If the flight was $99, but you had to pay $50 for a carry on, and $50 to sit next to your kid, it may not have been the cheapest option. The same goes for great deals in a store. Be aware that other things you purchase may cost more. Often the store is counting on you picking up a few other things that are overpriced while you are there.
 

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