The Death of the Price Tag

Lightbulbs, Groceries, Plane Tickets, Rent, Gas and Potatoes.

The 125 year old lightbulb

There is a 125 year old lightbulb hanging in a fire station in Livermore, California, still lighting up a room. It’s not like any lightbulb you’ll find in stores today. It’s made in ways, and out of materials, that, while not too different from modern lightbulbs, are far superior in every way. This superior lightbulb had one problem: it was too good.

On December 23, 1924, the people who ran the world’s biggest lightbulb companies met in Geneva. Osram came from Germany, Philips from the Netherlands, Compagnie des Lampes from France and General Electric from the United States. Their problem was that their bulbs worked too well. A good household bulb could burn for 2,500 hours, and a bulb that lasts that long doesn’t need replacing very often.

So they formed a cartel called Phoebus and agreed that a bulb should last 1,000 hours. To check up on each other and make sure no one was trying to sell a better lightbulb, members sent their bulbs to a lab for testing, and if yours lasted too long, you paid a fine. The media historian Markus Krajewski, who went through the cartel’s records in the Berlin archives, found that the average life of the bulbs coming out of its members’ factories fell by about a third in less than a decade. There’s a name for this. Planned obsolescence: making a product worse on purpose so it breaks sooner and you have to buy another one.

Meanwhile, a light bulb hanging from a cord in a fire station in Livermore, California, has been burning since 1901. It’s dim now, about as bright as a night-light. (Engineers will tell you a longer-lasting bulb gives off less light, and the cartel made that argument too. I call BS. A lightbulb cartel chasing brightness wouldn’t have needed to fine its members for making bulbs that lasted longer.)

Phoebus fell apart during the Depression and the Second World War. But the idea lived on. A handful of companies sat in a room, decided how much of your money they’d get and how much they could degrade their product, and built a lab to make sure nobody broke ranks. A hundred years later, they can skip the trip to Switzerland.

More of what you pay is now set by software built to find out how much you’re willing to pay. Sometimes that’s one company learning exactly how much you’ll put up with. Sometimes it’s a whole industry feeding its prices into the same program so nobody has to undercut anybody. Both lead back to Geneva: getting more out of you than fair competition would.

We used to be protected from this by a small piece of paper called a price tag.

Haggling with The Quakers

For most of human history, you haggled. You and the seller sized each other up and landed on a number, and the next customer might land on a different one. It’s like going to the car dealership and coming away proud of yourself because you talked the guy down into a price you thought was a steal. Haggling was how we determined the price for most things for most of human existence, and it didn’t take long for us to realize that it wasn’t exactly fair. The Quakers were among the first to commit to fixed prices, because charging people different amounts for the same thing seemed unfair, and maybe it had something to do with all men being created equal under God, who knows. It also turned out to be good business.

John Wanamaker usually gets the credit for the American price tag. He opened his first store, Wanamaker’s, in Philadelphia in 1861, and the business case for a fixed price tag was simple. Haggling over every item took time. Put a price tag on everything and people get in and out faster and buy more. Once prices were fixed, stores could print them in the newspaper. You could sit at the kitchen table with the weekly circulars, figure out who had the cheapest ground beef, and know the price in the paper would be the price in the store.

I used to work at a general store, and we had a price gun. When we did inventory or when shipments came in we’d tag everything, and figuring out the price wasn’t hard. The rule was usually to take the suggested price printed on the package and add ten cents. Whoever walked in the door paid what was on the sticker. We didn’t have barcodes or a scanner, the cashier plugged in the price for each item based on the tag. Good old fashioned analog shopping.

That sticker did three jobs at once. You paid what your neighbor paid. You could compare stores. And if one store charged too much, you could walk across the street. Lindsay Owens, who runs the economic think tank Groundwork Collaborative and just published a book on all of this called Gouged, told a Senate subcommittee in August that Americans have shopped under that assumption ever since: same item, same price, for everyone. (Her book is incredible. Highly recommend.)

When everyone was pissed at Coca Cola

The temptation to undo a transparent, fixed price and a competitive system never went away. In 1999, Coca-Cola’s chief executive, Doug Ivester, told a Brazilian magazine that the company was working on a vending machine that would raise its prices when it got hot outside. People want a cold drink more on a hot day, so the machine would charge them more for it. Coke, he explained, is “a product whose utility varies from moment to moment.”

The newspapers picked it up and people were furious. Pepsi said it was working on ways to make buying a soda easier, and one rival executive asked if the next machine would X-ray your pockets to see how much change you were carrying. Coca-Cola backed off.

What stopped Coke was the public finding out, and a technology simple enough to explain in a newspaper: a thermometer and a computer chip. Both of those protections are going away.

The Stanford Grocery Experiment

In 2022, Instacart bought a company called Eversight, whose software lets stores test millions of price combinations on shoppers. Instacart’s pitch to you is convenience. You pay a little more than you would in the store, and in exchange you don’t have to go to the store. Its pitch to retailers was that the price tests would be largely unnoticeable to customers and could raise a store’s revenue by up to 3%.

Last year, Consumer Reports, Groundwork Collaborative and More Perfect Union recruited 437 volunteers in four cities to fill the same cart, from the same store, at the same time. Every one of them was in a pricing experiment, and some identical items differed in price by as much as 23%. About two weeks after the report came out in December, Instacart ended the tests.

Instacart says the tests were randomized and didn’t use personal data, demographics or anyone’s shopping behavior. Sure, take that at face value. But every one of those shoppers was still a subject in a study of how much people will pay for groceries, and none of them knew it. That was the selling point.

Airlines are further along. Delta has been testing pricing software from an Israeli startup called Fetcherr since 2024, and it set out to expand it to 20% of its domestic network. At an investor day in November 2024, Delta’s president, Glen Hauenstein, described where this is headed: a price available on that flight, at that time, “to you, the individual.”

Fetcherr’s co-founder wrote a white paper, reported by Bloomberg, that walks through how the company rolls out its system for an airline. One stage is called the exploitation phase. (Exploitation is a standard term in machine learning for the stage where a system stops testing and starts using what it learned. It’s also the standard term for what humans call a rip off.) The paper also describes fare structures so complex they go beyond what a person can follow.

When lawmakers asked Delta about this, the airline said that it has never used, tested or planned a fare product that targets customers with individualized offers based on personal information. So the same company has said both things. You can decide who you believe the next time you buy a plane ticket.

Then there’s the store itself. Walmart is replacing paper price tags with digital shelf labels, and it has picked up patents on pricing systems along the way. One patent, for controlling those electronic labels, describes changing prices based on what’s already in your cart. Its example: “If a customer has tuna fish, they may be offered a different price for mayonnaise.” Walmart’s CEO, John Furner, has said your income, your shopping history, your urgency and what the company thinks you could pay won’t change the price. A patent isn’t a product, and Walmart says it isn’t doing this. I’d still like to know why you’d patent the ability to charge me more for mayonnaise because I bought tuna. (This is a bad example, I hate mayonnaise. But it’s a curious thing to patent a technology and then claim you have no interest in utilizing it.)

One more thing about the store. When you stand in a checkout line, the person behind you can see what you paid. At a self-checkout kiosk, it’s just you and the screen. And more stores are utilizing the “price gun” you carry while you shop and check out on the device to skip the line. I don’t know that anyone designed it this way on purpose, but a store that wanted to charge different people different prices would set it up exactly like that.

They use your data against you

Charging you personally means knowing who you are, and companies know a lot. In January 2025, the Federal Trade Commission released findings from a study of the middlemen who sell pricing tools to retailers, and Owens laid them out for the Senate. These firms track whether your cursor hovers over the buy button or starts drifting toward the exit. They build what they call inferred traits: your emotional state, your intent to buy, your willingness to pay, even whether you’re likely eligible for food assistance. They told the FTC their tools could raise a client’s revenue 2% to 5%.

Think about what you’ve posted lately. Maybe it was the promotion on LinkedIn, or the vacation pictures on Facebook. Maybe it was a post saying you’re looking for work because you just got laid off. Put that next to the ad targeting that already follows you around the internet and a company has a decent guess about what you want and how badly you need it.

These systems price your need, and need doesn’t follow income. Owens gave senators this example: a parent at midnight, with a sick kid, asking an AI shopping assistant for a thermometer and Tylenol. Whatever that parent earns, they’re about the least price-sensitive shopper alive. Walmart’s assistant is called Sparky. About half of Walmart app users use it, and shoppers who use it spend roughly 35% more, according to an earnings call where the CEO reportedly bragged about it. There could be lots of reasons for that number. Maybe Sparky users have more money, or were going to buy more anyway. Walmart has promised it won’t use what you tell Sparky to raise your prices. But they’ll keep bragging about how Sparky makes people spend more when the investors are listening. Isn’t that curious.

The Housing, Gas Station, & Potato (?) cartel

Everything so far depends on one company knowing you. The bigger problem shows up when a whole industry runs on the same software.

Price fixing is illegal. If the gas stations on your street agreed to all charge $5 a gallon, the Justice Department could take them to court, and that threat is supposed to stop them. It used to work partly because collusion was hard. You needed a meeting, a memo, a lab like the one Phoebus ran. In an industry with thousands of competitors, coordinating everyone was close to impossible.

Software makes it easy. RealPage sells software that landlords use to set rents. In August 2024, the Justice Department and eight states sued the company, alleging that competing landlords feed it their private rent data and the software uses all of it to recommend rents to each of them. According to the complaint, landlords were kept in line with an “auto accept” feature and pricing advisors who checked that they followed the recommendations. One landlord, quoted in the government’s case, called the product “classic price fixing.”

When lots of apartments sit empty, rents are supposed to come down. That’s supply and demand. ProPublica found that RealPage had in some cases recommended landlords accept more empty units to keep rents high. One of the software’s developers told ProPublica that leasing agents had “too much empathy.” The software doesn’t have that problem.

Gas stations do it too. In June, California drivers filed a proposed class action against Kalibrate, a fuel-pricing software company, and the chains that use it, including BP, Marathon, 7-Eleven and Walmart, which together run more than 1,700 stations in the state. The suit cites research finding that this kind of software raised prices about 6 cents a gallon on average and up to 30 cents per gallon where many nearby stations used it. By the suit’s math, every extra penny costs California drivers about $134 million a year. None of this has been tested in court. Californians have long paid more at the pump for known reasons, like the state’s cleaner-burning fuel blend. The lawsuit asks how much of the rest is software.

There’s even a version of this for french fries. Four companies, Lamb Weston, McCain, Simplot and Cavendish, make nearly all the frozen potato products sold in the U.S., and buyers have sued them for allegedly sharing data through a platform called PotatoTrack to line up price hikes. Frozen potato prices rose 47% between 2022 and 2024. The companies deny it. The Justice Department has since weighed in on the buyers’ side of the legal argument.

And there’s a version for hotels. Software from a company called Cendyn recommends room rates to hotels on the Las Vegas Strip, and Cendyn’s own marketing said hotels followed its recommendations 90% of the time. Guests sued. In August 2025, a federal appeals court dismissed the case, ruling that hotels each adopting the same pricing software isn’t price fixing. (I’d like to hear what exactly the court thinks that is, if it isn’t price fixing.)

That’s the defense across all of these. The software only suggests. A person decides. When the person takes the suggestion nine times out of ten, I’m not sure where the difference is.

It gets worse because so few companies own so much. Owens told the Senate that at least 75% of U.S. industries have consolidated since 1997, and we’re down to four major airlines. Concentration has been part of the American economy for a long time. What the software does is reach the industries that used to be too crowded to coordinate, like apartments and gas stations, where thousands of owners would have needed to agree.

The penalties don’t scare anyone either. In November 2025, RealPage settled with the Justice Department. It agreed to change how its software works, paid no financial penalty and admitted nothing. If you’re a company deciding whether this is worth the risk, there’s your answer.

God bless the earnings call

Companies rarely tell customers what they’re doing. They do tell investors. Every quarter, public companies get on the phone with Wall Street analysts and explain how they made their money, and that’s where you hear it.

During the pandemic, we heard a lot about how hard things were for the big companies. Supply chains broke and costs went up, and companies passed those costs on to consumers “because they had to.” Then you’d listen to the earnings calls. In June 2021, Kroger told investors that “a little bit of inflation is always good in our business.” In 2024, the FTC found that grocery retailers’ revenue climbed above 6% over their costs in 2021, higher than their last peak in 2015, and hit 7% in 2023. The agency concluded that some firms seem to have used rising costs as an opportunity to raise prices further and grow their profits.

You can’t be struggling to keep up with your costs and posting your best margins in years at the same time.

To be fair economists don’t agree on how much of this was greed. The costs were real. Economists at the Kansas City Fed found that rising markups could account for more than half of 2021 inflation, but the timing looked more like companies raising prices ahead of costs they expected than companies flexing new power. Economists at the San Francisco Fed concluded that price gouging wasn’t a primary cause of the 2021 to 2022 surge. My read is that it was a mix; if the price increases were simply a matter of necessity then the earnings call wouldn’t have been such an upbeat one. There was real pressure, but companies used the cover of that pressure to take more than they required. A war, a pandemic and a Fed rate hike all give a company a story the public already believes.

And when prices climb, the main tool we reach for is the Federal Reserve raising interest rates. Higher rates make borrowing more expensive for everyone, including the people who never got the markup and can least afford a bigger credit card bill.

So why shouldn’t a company charge whatever it can get? Because a market works when you can see the price and walk away. Take away both and the seller is setting the terms of a deal you can’t see. This is our economy working the way it was designed to work, and it was designed to take as much as you’ll give.

And you’ll never have to shop again

Up to now, you’ve still been the one shopping. You see a price and decide. The next step takes you out of it.

On September 8, Meta launched Muse, an AI agent that can book travel, fill out forms, negotiate on your behalf and check out for you. Meta also owns Facebook, Instagram and WhatsApp, so Muse comes from a company that already knows a lot about your life. So say you tell it, “Buy my groceries for the week. Here’s what I need.” What happens when Meta has a deal with a delivery app, and the delivery app has deals with Walmart or ShopRite or Wegmans, and all of them can see what you’ll pay for each item on your list? The agent goes off and buys your groceries, and you never look at the price at all.

The same technology could protect us. An agent could check every store, catch the markup and find the lowest price, which is what online shopping was supposed to do in the first place. Owens put the problem to the Senate in one question: whose side is the agent on? The early evidence isn’t encouraging. Researchers at the University of Washington and Princeton tested AI models after adding advertising and commercial incentives, and found the models consistently favored the company over the user, steering people toward more expensive products and even toward payday loans.

There’s a fix with a long history. When a person acts as your agent, like a real estate broker or a lawyer, the law requires them to act in your interest and disclose their conflicts. Sen. Mark Warner has drafted legislation that would hold AI agents spending your money to a similar standard.

So what do we actually do?

Outrage works. It stopped Coke in 1999, and it stopped Instacart’s experiments within two weeks. Newspapers used to do that job (and they still do, thank you very much). Now it’s people posting videos on TikTok and Instagram about what they caught an app doing, and companies are paying attention, because telling customers you’re doing this is a terrible business strategy.

Then there’s the law. We could regulate, break up the consolidation, fund the agencies responsible for oversight. Of course, whenever the government tries to step in someone always screams socialism, anti-capitalist, a threat to competition. But rules that keep companies from secretly coordinating their prices are what make competition possible. Owens made the same case to the Senate: clear prices are essential for a functioning capitalist economy. It’s ridiculous that enforcing those rules gets called socialism while the collusion gets called the free market.

I think we haven’t had the money or the political will to keep our markets competitive, and a big reason is that the companies that benefit have a lot of say in Washington. So most of the action is in the states. New York already requires a disclosure when an algorithm sets your price using your personal data, a rule retailers are fighting in court. In June, the New York legislature passed the One Fair Price Act, which would ban surveillance pricing outright, and it’s waiting on Gov. Kathy Hochul. Maryland and Connecticut have banned it for groceries.

In July, New Jersey Gov. Mikie Sherrill signed the Fair Price Protection Act, which bans using your personal data to set prices on groceries and household necessities starting August 1, 2027, and puts a one-year pause on new electronic shelf labels while the state studies them. Shoppers will be able to sue under it. I wrote about the NJ law for Morristown Minute, and my worry is enforcement. Owens told the Senate that uncovering surveillance pricing means comparing prices across users, devices and locations all at once, which is hard for researchers and nearly impossible for a shopper. A ban only matters if somebody can catch the violation.

Still, more than 40 bills in 24 states and cities, in red states and blue ones, have been introduced or passed this year. State by state is slow. Right now, I think it’s our best chance.

That bulb in Livermore is still on. It hangs from a cord in a fire station, dim as a night-light, and it’s proof that someone could build a bulb that lasted a century while an industry decided you shouldn’t have one.

The price tag was a decision too. Quakers and a Philadelphia department store owner decided everyone should pay the same, and for more than 150 years that’s how we shopped. The companies building this software have made a different decision, and they’re making it quietly, one shopper at a time. So pay attention to the price on the screen. When something looks off, say so loudly, because that’s what stopped Coke and Instacart. Then call your state legislators, because that’s where this is being decided.

We decided once that everyone pays the same. We can decide it again.