Since I spend most of my disposable income on Amazon, I found this article on their pricing strategy somewhat disturbing:
Imagine this: You go to a bookstore, browse, choose a couple of volumes. But you don't want to carry the books around. So you ask the clerk to hold the tomes until Saturday, when you'll come back to buy them.
When you return, the bookseller hands you the items but advises you that he's raised the prices. "I knew you were hot to buy them," the clerk says, "so I figured I could make a few extra bucks."
That's what it feels like online bookseller Amazon.com Inc. has been doing to me.
On Nov. 6, seeking to boost my dubious culinary skills, I decided to buy "The Cast Iron Skillet Cookbook." I went to Amazon and placed the book in my electronic shopping cart but got distracted and never finished the transaction.
The next day, I signed on to Amazon again. A pop-up message informed me that the price had increased from $11.02 to $11.53.
This isn't the first time Amazon has been caught fiddling with their prices. In 2000, they admitted to "randomly" charging different people different prices for the same DVD.
I have had things go up and down by as much as a dollar or two. I've had really frivolous purchases stored in my basket for a year and watched the price go up and down both.
Using Google's Froogle price-comparison engine (which scours the web and, unlike some others, does not require sellers to pay to be shown in results) I see that shop.com has it for $10.31, someone on ebay has it for $7.30 (plus $8 shipping?!?!) and buy.com also has it for $10.31.
Same thing happens to me on occasion - in my case though its because the one of the Used copies (usually the cheapest) drops off the list. I dont think that the Buy-from-Amazon-brand-new price has ever changed for me though.
Just jacking up the price if it stays in someones cart doesn't make sense - the customers with the biggest gap between what they will pay and what they are paying are the ones who are going to put down their money first and keeping an item in the cart is a good indicator that the buyer may be comparison shopping; if anything, you'd want to put the bigger price upfront and drop the price if it is sitting in the cart too long.
The simplest and most likely explanations are that it's used to even out demand to make supply chain management easier and respond to changes in the competition's pricing - the normal reasons, but they can do it quicker that a retail chain could and its more conspicuous when they do - most people wouldn't notice if an item they were looking at a week ago had changed $0.50 since their last visit to the store. They may also be trying to gather price-elasticity data by adding a small amount of random variation up or down to see how many people either seal the deal or drop the item, but that seems more consistent with the behavior in 2000.