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

October 3rd, 2012 by · 53 Comments · ebookstore news

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.

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53 Comments so far ↓

  • TheSFReader

    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…

  • Syn

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

    • Logan Kennelly

      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.

      • Elizabeth Lang

        Yup, I’ve heard of Amazon pricing differently like that too, but maybe they’ve changed. Of course, Amazon does other things that aren’t very customer-friendly either.

        For Kobo, because it’s so inconsistent, it seems to be more of a bug than a deliberate act.

  • burger flipper

    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

  • Eric

    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.

  • carmen webster buxton

    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.

  • Brian

    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).

  • Alexander Inglis

    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.

    • Peter

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

    • RevBobMIB

      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.

  • Xendula

    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

  • anonymous

    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/ ?

    • Nate Hoffelder

      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.

  • anonymous

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

  • Doug

    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.

    • Fbone

      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.

  • DMK

    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.

  • MikeJ

    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.

  • Purple Lady

    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.

  • Ani

    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.

    • RevBobMIB

      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.

      • Brian

        I just checked Catching Fire and Mockingjay and they show the same for me as they do for RevBobMIB ($5.99 ea & then $11.19 ea).

        • Brian

          I just noticed something. While logged in if I search for “hunger games” I get a list of results which show the same prices as when I’m logged out, but if I click on the individual titles for more details the price changes to the higher one.

          From either the results list with the lower price or the details page with the higher price I get the higher price if I click the buy button.

    • Nate Hoffelder

      And a programming error would make it okay to screw this up?

      Note, also, that it is 2 days later and the bug persists.

  • Hayden

    I also got a different price for ‘Frozen Heat’ but mine went the other way. I can get it cheaper when I go to buy it. Without logging in, the price is $16.79 but when I log in, the sale price is $13.50 + $0.40 for City Tax and $0.88 for State Tax, a total of $14.78. So I am not being ‘gouged’.

    My current location is China and my account is linked to my Seattle address .

    I cannot begin to imagine the complexity of agreements between publishers, their overseas offices and ebook sellers. It could be a lot simpler and people would not need to feel like they are not being treated equally or fairly

  • taming

    I surf with a VPN on that makes it appear that I live in the US. When I sign into my account the game is up–and my Canadian account holds sway for prices.

    If I change to a US address ( think summer home) within my account, the prices are the same whether I am signed in or not–both states are reflecting US pricing. I also do not have this kind of problem when both my account and my IP address are Canadian. Prices are the same when I am signed in and when I am not.

    • Puzzled

      Before I buy an eBook, I use a VPN to check out the prices in a variety of global locations. Creating a new Kobo account in another country is easy (if you can create multiple email addresses for yourself) as they don’t ship anything (and any search engine can easily provide an address in another country).

  • Emma Cunningham

    According to someone I know at Kobo: “We don’t charge different prices to different customers in the same territory.”

    So, I’m guessing it’s a markets/territory thing, and that they don’t use spyware to figure out where you’re from and customize your pricing accordingly when you’re not logged in.

    • Nate Hoffelder

      Except I’ve already gone through this point both on my own (before I posted) and with a Kobo programmer. Kobo is correctly tracking my IP address when I am not logged in. There is no spyware required.

      Kobo knows I am in the US and they show 2 different prices. And they are still dong it as of 15 minutes ago.

  • Tyler

    I just tried it and was initially given the $13.50 price then it jumped $16.79 when I went to the checkout. All that for a book I would only pay half that to read.

  • T

    I have seen this at other retailers like 6pm.com; I shop for an item one day and get price x, which is a low price. Next day same item price you and much higher. It has happened for years to me. Something about cookie tracking because it’s just on my computer, not someone else’s. They do it on purpose but I still can’t figure out why! Curious to hear what Kobo has to say about this bizarre pricing strategy. I do know Victoria’s secret used to and might still send out multiple versions of the same catalogue with different pricing too. Might be an updated version of that same strategy.

  • Lark

    I got the two different prices on the “Frozen Heat” book, as well as several other Hyperion titles. I contacted Kobo directly, and finally got an answer back from them, to the effect that when I’m not logged in, I see the generic (U.S.) price, and when I am logged in, I see the “location price.” Since I’m in the U.S., I’m not buying that explanation (unless they actually charge different prices depending on where you are in the US, which seems odd.) On the other hand, I can no longer replicate the problem on the titles I mentioned to them, which seems odd, to say the least. Did they correct the problem at large, or merely change some setting for my account? Has anyone else had the price difference disappear in the last day or two?

  • Lark

    That’s what I wondered. Perhaps they changed some setting on my account.

    • RevBobMIB

      I called Kobo on October 9 to follow up on the issue, and I spoke with a supervisor who actually seemed to not only grasp the issue, but share my concerns about it. Since then, I’ve been pretty busy with work, but today I logged into my account to see if anything had changed, since I hadn’t heard back from that supervisor.

      Wonder of wonders…the problem seems to have been resolved. My account is no longer showing different prices on the books I’ve been checking, and I have not found any other discrepancies. Frozen Heat, Rick Riordan, Jenny McCarthy, Hunger Games…all the prices are staying constant. Agency books are showing sales tax, but non-agency books no longer do.

      Is anyone else still seeing price differences, or has Kobo actually fixed this across the board?

  • KMac

    To add to this pricing issue – Canadian customers, watch the taxes. I have an ongoing issue with Kobo as both GST and HST show in the total (Ontario incorporates the GST into our HST). Kobo has yet to satisfactorily solve this other than to ask if I’m logged in.

  • anna

    Same issue about the GST and the HST simultaneously being charged on the book I want to order. How are they getting away with this? And does anyone know if the Amazon ebooks work on the Kobo ereaders?

  • Jones

    The problem is still there, and it’s there for indie authors as well. Check out A Stage For Traitors at Kobo. The list price is 3.99, the same as on the Smashwords page, but if you click on the book, it’s price is changed to 4.95. http://www.kobobooks.com/ebook/A-Stage-For-Traitors/book-DX9wEtgVKEC6D8FgbwS-Xw/page1.html
    This makes no sense. Why would they gauge the price for an indie book that’s only recently appeared?

  • Marty

    I’m an American that’s currently living in Greenland and when I look at Amazon for books the prices are different. If I’m logged out they are higher than if I’m logged in (I have my account set for USA, not Greenland/international).

    I just looked on Kobo and they show Frozen Heat as 20.99 on the product page whether I’m logged in or not, but on the search page it’s only listed as $16.79. Does seem strange to me.

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