Sam’s Club is making a bold move by eliminating cash registers and introducing a fully digital shopping experience powered by artificial intelligence. This shift is raising eyebrows, particularly among privacy advocates who worry that the new technology could lead to unfair pricing based on customers’ shopping habits.
The change began with the reopening of a Sam’s Club in Grapevine, Texas, which was rebuilt after being damaged by a tornado in 2022. This location has become the first to implement a “Scan and Go” program, allowing customers to scan items as they shop and pay through a mobile app. The program has already been tested in several other stores in the Dallas area and one in Missouri.
Instead of checking out with a receipt, customers will walk through an archway equipped with AI cameras. These cameras will take pictures of the items in their carts and match them with the purchases made through the app. While Sam’s Club has not announced when this technology will reach California, it does have stores in Torrance, Fountain Valley, El Monte, and Riverside.
The company plans to use data from the app to tailor promotions to customers based on their shopping patterns. However, consumer advocates are concerned that this could lead to higher-priced items being promoted to certain shoppers while discounts on lower-priced items are downplayed. Sam’s Club insists that it is committed to offering low prices to all customers and is not using AI to push higher-priced items.
The concept of “surveillance pricing” has become a hot topic, especially as retailers increasingly collect personal data to set prices. This practice involves using a customer’s information, such as location and shopping history, to offer tailored prices. For example, a pharmacy might target discounts on specific products to infrequent buyers instead of regular customers, attempting to retain those less frequent shoppers.
The Federal Trade Commission has found that some companies use sophisticated data collection methods to determine how much a customer is willing to pay, which can lead to discriminatory pricing practices. Experts warn that this could result in consumers paying more without understanding why. The concern is that customers may not realize they are being charged differently based on their shopping behaviors.
Despite these concerns, Sam’s Club maintains that it is not engaging in surveillance pricing. According to Harvey Ma, a vice president at Sam’s Club, the company follows an “everyday low price” strategy, which means it aims to offer competitive prices consistently rather than relying on high-low pricing tactics that involve promotions and discounts.
As Sam’s Club moves forward with its digital shopping experience, customers are encouraged to be mindful of their privacy. The Federal Trade Commission suggests regularly deleting browsing history, adjusting privacy settings on apps, and using ad blockers to limit tracking.
With this innovative approach, Sam’s Club aims to enhance the shopping experience while navigating the delicate balance of customer privacy and data use. As technology continues to evolve in retail, the conversation around privacy and pricing practices is likely to grow.