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Why is Kobo Price-Gouging Some Customers But Not Others?

While some retailers like Amazon like to selectively discount prices in order to get you in the door, other sites like Kobo prefer to jack up the prices charged to their regular customers. Got a few minutes? Go check out the price on this ebook at Kobo: Frozen Heat. Make a note of the price and then log in (or log out). If you can see 2 different prices (I do) depending on whether you're logged in to your account, congratulations. Kobo is gouging you on the price (unless you see a price discrepancy the other way, which is possible).

Earlier today Mike Cane hooked me up with a friend of his on Twitter. @RevBobMIB was browsing the Kobo eBookstore this morning when he noticed something odd. The pricing seemed strangely inconsistent, and after checking the price of the ebook mentioned above he discovered a fascinating secret about Kobo.

As you can see in this screenshot and this screenshot, Kobo offers some of their customers a lower price than the price offered to other customers. Here is a composite, and please note that I have seen these prices as well:

@RevBobMIB is one of those not so rare individuals who has more than one account at a single ebookstore, and that's how he learned about this. Luckily for me you don't need a second account to see the discrepancy; I confirmed it simply by logging in.

The book we're using as proof is merely one of a number of titles which I have seen pricing discrepancies. Here is another. And here is a third title. None of this is illegal, but it is rather curious that Kobo is so blatant about it. I mean, all it took was simply logging in and out to confirm the discrepancies.

BTW, I found those other examples in under 3 minutes. Want to take a guess how many others we might find with a little work?

All 3 of the examples are published by Hyperion, a Disney imprint, and since they are not agency titles Kobo can price the ebooks however they like. (Now there's a benefit from Agency pricing which I never expected; it protects me from deceptive retailers.)

Now, I'm sure that several readers are planning to respond with details about different prices in different markets and how it is all very normal. Someone might even bring up my complaint against Amazon and how Amazon tacks on unexplained fees in certain markets.

This is all very true, but Kobo is doing something different. Kobo is changing the prices shown to a single customer, browsing from a single computer, getting online from a single IP address. For some reason, Kobo feels it necessary to increase the price they charge to registered users. I'm not sure why, but I suspect that they want to encourage some of us to shop elsewhere.

It would certainly work on me; Frozen Heat, for example, costs under $10 at Amazon (either $4 or $7 less than the Kobo price) And Amazon shows me the same price whether or not I'm logged in to my account.

I have reached out to Cerys Goodall at Kobo for an explanation as to why this is happening; if she responds I will update my post. If anyone else at Kobo can explain Kobo's pricing policy, feel free to leave a comment or send me an email.

But if you're going to start off by saying it's not illegal, please shut up. I know this is legal, but that doesn't mean I like it. I also know it is not exactly uncommon in some industries or with certain products, but that doesn't make me any happier when I encounter it at an ebookstore.

I find this incredibly off-putting, and it makes me wonder what other tricks Kobo is pulling behind the scenes. But I will leave that up to someone else to find. I'm going to buy my ebooks at Amazon. Unlike Kobo, Amazon actually likes customers.

54 Comments on Why is Kobo Price-Gouging Some Customers But Not Others?

  1. Could it simply be a case of taxes ? the higher price seems to be used when the user is logged in, in which case, the server would be able to take taxes into account with the customer’s “country” information, whereas when not logged, no tax is computed ?

    Yes, I know, that’s a fairly weak argument, especially as the “increase” rate doesn’t seem to round up correctly in any way…

  2. And these companies are so worried about Amazon, when its stuff like this that hands Amazon more customers.

  3. Taxes are added when you pay for the ebook, not before. My source checked this.
    http://twitpic.com/b0nezd

    BTW, if taxes were the cause I would think there would be some kind of consistency to the price hike. Not all hyperion titles showed a higher price when I logged in. One even showed a lower price.

  4. Thanks. That screenshot DOES confirm the overpricing…

  5. No, in our Twitter chat it was established that taxes are added ON TOP of the retail price shown, at checkout.

  6. burger flipper // 3 October, 2012 at 10:55 am //

    There are 6 different search results for “The Cost Disease” at 3 price points. Not the same issue, but strange as well.

    http://www.kobobooks.com/search/search.html?q=cost+disease

  7. Just so we can remove the taxes discussion, I live in Oregon, and there’s no sales tax here. I see the exact same prices Nate put in his screenshots before and after logging in.

    And I find this very disappointing. I’ve been a Kobo fan, but I don’t like this at all.

  8. That is bizarre! And I was so happy that Kobo had finally price-matched Smashwords and made my first free ebook free in their store! It looks like it’s free whether you’re logged on or not, but still, this is not encouraging. I wonder if Kobo assumes folks always log on before they browse, which I think would be a very false assumption.

  9. I get the same two different prices when I try this. One more reason to not be particularily happy with Kobo (their crappy customer service being another).

  10. I doubt if Kobo is price gouging and find this conclusion premature. What it DOES look like is a faulty database algorithm. I should point out that these anomalies are not new: the pop-up price, the single book view price and the price at the cart are often different while signed in.

    So, yes, you are highlighting a database problem (which is a PR problem, too). But nothing you have presented supports intentional gouging.

  11. Umm, that same ebook costs $9.45 on Amazon.com. That’s why I much prefer it to any other ebook stores.
    http://www.amazon.com/Frozen-Heat-ebook/dp/B007OV3JOC/ref=sr_1_2?ie=UTF8&qid=1349279648&sr=8-2&keywords=Frozen+heat

  12. to OP: Do you have billing info saved in your profile, and if so, what country have you selected? Also, what’s your ip address when you go to http://www.whatismyip.com/ ?

  13. The IP address is irrelevant because I already know that Kobo tracks your IP address. They won’t show you ebooks which they cannot sell to you. For example, there’s a whole bunch of Mathilda books in the Kobo store which I cannot see because they cannot be sold in the US.

  14. not necessarily – prices are different depending on how your country resolves, which is why I’m curious (and trying to help).

  15. My web access comes via Comcast and it has this label attached. As you can see it is pretty clearly in the US.

    c-76-114-246-66.hsd1.va.comcast.net

  16. OK, looks good. On your account settings page, https://www.kobobooks.com/account/accountsettings.html , do you have United States as your selected country, or is it something different?

  17. I do not see where I can specifically set the country, but my billing address is in the US, yes.

  18. The value of this field shown here http://imgur.com/aHghx is the one I’m curious about

  19. That says United States, yes.

  20. I went the Kobo not logged-in, got the $13.50 (50% off) price. I clicked the “Buy Now” button, which of course requested that I log in; the log-in page shows an Order Summary of $13.50 (50% off). After I finish logging in, the order confirmation page shows that $16.79 (38% off) will be billed to my credit card.

    That’s naughty.

  21. My experience is the same as Doug’s. If one is not careful, you may not realize the price increase.

    I am interested to hear what Kobo says about this.

  22. I went to kobo.com, searched for Frozen Heat, and found it at $14.99. 42% off. That price stayed the same when I logged in. When I got to the Order Summary page it was $16.94. However, that’s the price to be charged to my card, which includes taxes.

  23. Hmm, I wonder if someone’s at work behind the scenes. I just tried the experiment, including going to the order summary page like DMK, and got $13.50 the whole time.

  24. That is the weird part; not everyone sees the price discrepancy. But I can still see it (I just checked).

  25. I have two different logons with Kobo, and I see the 16.79 price with my normal logon but 13.50 with my other. The difference between the two is that the one that shows 13.50 I only bought one book with and the other I bought a lot of books, usually with a coupon.

  26. If it’s accidental they should issue apologies and refunds.

  27. Well, Nate, inflammatory rhetoric always gets lots of responses. Your 3 examples all have the same publisher, Hyperion. Let’s give Kobo the benefit of the doubt that this is a programming error.

  28. Logan Kennelly // 3 October, 2012 at 6:18 pm //

    We don’t quite know what’s going here, but Amazon used to present different prices to different customers depending on some unknown collection of factors.

    The negative press convinced Amazon to stop the practice, but it’s not like they weren’t doing this intentionally. At least Kobo appears to be doing this as a result of a bug.

  29. Those three examples have the same publisher. Not all books from that publisher show the overpricing (example: Jenny McCarthy’s “Bad Habits: Confessions of a Recovering Catholic”), and examples from different publishers show different amounts of overpricing.

    All three of the Hunger Games books (from Scholastic) are affected, with the second and third books leaping from $5.99 to $11.19 each. “Breaking News,” by Fern Michaels (from Kensington) is affected, but only sees about a 10% jump.

    Kobo tried to tell me this was a website bug (“a delay in prices getting updated”) last week, but I’d also alerted them to it about six months ago. Nothing has changed in all that time; that’s why I went public. People deserve to know when they’re being ripped off.

  30. If it were a database problem, it would happen to everyone, regardless of account. What I verified this morning is that some accounts get gouged and others do not.

    I verified the selective gouging by using the second account – same type of credit card, same billing address, same IP address as the first – to buy an affected book as a gift for the first account. Not only did the second account not get gouged, it wasn’t even charged sales tax. The $10.00 search-list price remained $10.00 on the single-book page, became $6.50 on the checkout page after a 35%-off promo was added, and that’s what the final receipt shows.

    That same book, on the first account, went from $10.00 to $12.39 to $12.39 plus tax through that same path…at which point I didn’t bother with a promo code.

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