Regulations May Restrict Pricing Tactics and Technology

Various technologies now enable retailers to change product pricing in ways that have raised questions about ethics and legality.

Many states have enacted, or are in the process of enacting, legislation to address the use of technology in changing prices. In 2025, over 100 price transparency bills were introduced across 33 states. Several states enacted laws requiring firms to disclose when prices are adjusted using real-time data or algorithms.

Specific pricing tactics include dynamic, algorithmic, and surveillance pricing. Dynamic pricing involves real-time adjustments almost instantaneously. This can be done with digital shelf tags (also known as electronic shelf tags) or by changing prices in apps.

Algorithmic pricing is when prices are automatically changed based on data. In many cases, artificial intelligence is used to set the prices.

Surveillance pricing sets prices for specific individuals or groups of customers based on personally identifiable information obtained through electronic surveillance. Methods could include using location data, browser history, device information, and search or purchase history.

This technology is being implemented. For example, Walmart has already installed digital shelf tags in over 2,300 stores, with plans to install them in every store by the end of 2026.

Video Spotlight:  

• WATCH: 4 things to know about first-in-the-nation ban on surveillance pricing (May 8, 2026, PBS NewsHour)
• Walmart rolls out digital price tags: Here’s why advocates are concerned (Mar 28, 2026, Global News)
• Walmart rolling out digital shelf labels in all U.S. stores (Mar 6, 2026, WTVQ)
• Are digital shelf tags driving up grocery prices? (Mar 25, 2026, KMOV St. Louis)
• Lawmakers consider surveillance pricing ban for grocery stores (Mar 27, 2026, KSTP 5 Eyewitness News)

This post is based on the Grocery Dive article, Grocers Face State and Federal Lawmakers’ Scrutiny Over ‘Surveillance’ Pricing, by Peyton Bigora and Catherine Douglas Moran, March 17, 2026; the USA Today article, Walmart Adds Digital Shelf Labels to All US Stores. What To Know, by Greta Cross and Saleen Martin, March 5, 2026; the Chain Store Age article, Walmart Plans Chainwide Rollout of Digital Shelf Labels, by Dan Berthiaume, March 4, 2026; the MultiState article, States Tackled Algorithmic Pricing and Price Transparency in 2025 (Plus, What to Expect This Year),  by Katherine Tschopp, January 13, 2026; the ACLU article, “Surveillance Pricing” Hurts Consumers, Incentivizes More Corporate Spying on Them, by Jay Stanley, September 12, 2025; the University of Oxford article, New Oxford Research Reveals Uber’s Algorithmic Pricing Leaves Drivers and Passengers Worse Off, June 23, 2025; and the YouTube videos in the Spotlight. Image source: Zapp2Photo/Shutterstock

Discussion Questions:

1. What benefits are gained from digital shelf tags beyond pricing tactics?

Guidance: One of the biggest benefits is the ability to quickly and easily change prices. For many retail stores, price changes require updating traditional shelf labels across the entire store, which can require hours of worker time. Workers can now be deployed to other tasks, such as customer assistance.

Another benefit is that the price on the electronic shelf label matches the electronic price book used in the checkout process. This improves the accuracy of the price charged.

Digital shelf tags can also help with slow-selling items. For example, the produce manager at a grocery store notices that a batch of apples has been on the shelf for a long time and will spoil soon, and can quickly reduce the price to speed sales. The same is true for any slow-moving items, helping clear shelf space for faster, more profitable items. Algorithmic pricing could be used to accomplish the objective.

Walmart is adding features to gain added benefits. Their shelf tags can light up to help people picking online orders find the item on the shelf, reducing the time to fill orders.

The light-up benefit can also be used by workers conducting an inventory count, again by helping the worker save time in finding the inventory item.

Electronic shelf tags can display the inventory database’s inventory count, packout, or shelf capacity to help speed the inventory process.

A further addition is to add QR codes to the electronic shelf tags, which can be used for a variety of purposes. Customers can scan the QR codes to be directed to information about the product, including sustainability information, product content, product technical information, and owners’ manuals.

2. Should dynamic, algorithmic, and surveillance pricing be restricted or banned?

Guidance: Their use raises a variety of ethical concerns. When these methods reduce prices, customers are generally happy, and the reverse, of course, creates dissatisfaction.

In general, customers are concerned about why one customer receives a different price than another. The reason for a price difference needs to be ethical. Because price changes can target individual customers, decisions about how to set prices can be problematic, potentially leading to discrimination against protected groups.

3. What guidance would you provide for companies that are considering using these technologies?

Guidance: As many of the proposed laws address transparency rather than eliminating the technologies or tactics, providing some form of transparency is needed. Consideration should be given to how customers are informed and where the information is available.

Interestingly, Uber has reduced transparency since implementing its “Upfront Pricing.” The initial argument for dynamic pricing was to raise prices for customers while increasing pay for drivers to encourage more drivers to respond to high-demand areas. However, a recent study found that Uber made the system less transparent and took a larger share of the profits through higher prices.

Surveillance pricing is one of the most problematic methods, and a target of many proposed bills. Care must be taken to avoid disparate impact with pricing.

The frequency of price changes should also be considered. Price stability is a concern for customers. Of particular concern is multiple same-day price changes. Walmart has indicated that it will only change prices overnight. Many of the proposed laws have similar requirements.

Price gouging is also a concern. Will the automated pricing mechanism trigger a price increase in an emergency, inadvertently leading to price gouging? Mechanisms should be in place to prevent such an automated reaction.

With legal and regulatory oversight on the horizon, organizations need to monitor changes to ensure compliance. Organizations operating in multiple states will face increased complexities, given that many of the proposed laws differ at the state level.