Gouged: why Americans are being ripped off – and what to do about it

“Repeat after me: it’s not my fault, it’s not my fault, it’s not my fault.” That’s the message to frustrated US shoppers in Gouged: The End of a Fair Price – and What That Means for Your Wallet by Lindsay Owens, economic sociologist and head of the Groundwork Collaborative, a progressive Washington thinktank.Consumer rage is rising and no wonder – we are all living through the “reinvention of the rip-off”, Owens told the Guardian, an experience that is undermining Americans’ trust in the economy. Nothing short of a consumer uprising and a slate of tough new rules is going to fix the problem, she believes.The book concludes with a “shoppers’ bill of rights” that lays out how local and federal governments could write rules to fix the problem: ban companies from using shared software to coordinate prices, it urges, and require AI ‘shopping assistants’ to act in consumers’ best interest, not steer them to higher-price items, among other moves.“A cost of living crisis is the right time to build the constituency for a revived consumer movement in this country,” Owens says.The following interview was compiled from several conversations and edited and condensed for clarity.Why did you write Gouged?Right around the time that America started experiencing rising inflation and cost of living in 2021, I started to realize that there was something else going on besides just high prices. The way companies were talking about pricing was starting to shift.Their costs were going up but they weren’t too worried about it. They were planning to pass all of their rising costs along to us, and they were pretty bullish about gilding the lily and going for more.In an economy with competitive pricing, that shouldn’t happen, right?I started to see a little bit of a breadcrumb trail: “Oh, these companies are bullish because they have a plan for this, right?” They have some new techniques and technologies they’re planning to deploy, they have some new partnerships, they’ve been buying up AI pricing companies … they were ready for this moment.What actually changed inside corporate boardrooms? Cost-cutting hit bone. I cut my teeth in academia and the Senate studying the ruthless form of American capitalism that’s centered around it: bust unions and keep wages down, pass Nafta and outsource labor, bring in the bean counters from the big four accounting firms and ask: “How do we limit our regulatory costs?”Low prices were part of that part of capitalism.But there’s been a shift toward the revenue side of the ledger that includes getting better on price hiking. That’s easier to do when there’s less competition, but it’s also the result of new technologies.Gouged details data mining companies unknown to the average consumer, like EverSight, Kronos, Plexure. How important have they been to the “gouging” problem US consumers are facing?Hugely important. Their dossiers contain thousands of data points and inferences about consumers, including their age, income, health, religion, and even partisan affiliation.Virtually no one evades data brokers’ grasp. One data broker claims to have data profiles on roughly 95% of adults.With these troves of personal data in hand, retailers increasingly rely on outside consultants and AI startups who specialize in the “art and science behind pricing decisions”. They run experiments on consumers – and even personalize prices to each consumer’s pain point.Should these companies exist in an economy that’s also fair to workers and consumers?Profit maximization is not intrinsically problematic. In a competitive marketplace, companies would have to compete on price and quality in order to win over consumers, resulting in better products and better deals. However, as competition disappears and the law struggles to keep pace, new technologies and newer, more brazen methods of corporate profiteering erode the basic social contract between shoppers and retailers.Companies whose sole purpose is to harvest consumer data would probably cease to exist if Congress had passed adequate privacy protections. Companies should not get a gold star for refusing to gouge customers; they should be required not to.There’s a lot of telling history in this book, like the lightbulb that has been burning in California for 120 years, and how manufacturers banded together to make sure they never lasted that long again. Yet we’re still surprised by “planned obsolescence”. Have modern US consumers just been too naive?I think we all have a sense that this is going on and something has shifted, but we don’t fully appreciate how systematic and how purposeful this is.Whether it’s making the jar of Skippy peanut butter concave, degrading product quality, locking you out of something you bought, forcing you to pay top dollar for parts and repair – all of that is really baked into how companies operate these days.I don’t think Americans are naive. But every 10 or 20 years we need to have a conversation about what we’re owed as consumers and shoppers. It’s time to update the rules.How are American shoppers doing right now?I think American shoppers are exhausted. High prices make shopping pretty treacherous.The amount of basics Americans are putting on credit cards, the amount of Americans who are using things like “buy now, pay later” shows how difficult it is.Adding insult to injury is the increasingly opaque manipulative and volatile way that corporate America does pricing.This reinvention of the rip-off that we’re all living through has undermined trust in one of the major ways we participate in the economy.Comparison shopping is almost impossible now. Trying to get a refund is a three-day battle with a chat bot, and even if you think you won, you’d better remember to check with your bank to make sure they actually follow through.Where are we in the current inflation and rising cost cycle?I don’t even think we’re even at the halfway point. This is something I’ve been saying since 2022. Every time I was on the Hill, I was screaming at the Biden administration to focus more on prices and cost of living.This is a once-in-50-year period of high inflation. Something has completely changed in our culture and our economy, in our politics, and you have to be responsive to it.You wrote Gouged before the US and Israel attacks on Iran, which have ramped up inflation.Yes. I do talk in the book about Trump’s trade war, and its impact on prices. The Iran war is similar. Most Americans do understand how gas prices ripple through the whole economy.The fog of war, the fog of crisis, is really powerful. It makes it so that Americans have a hard time discerning which piece of the price increase is indeed because of import costs, and which is companies gilding the lily. Buckle up.You expect companies to take advantage of the war?Absolutely.What about your personal shopping? How are you and your family navigating this situation?The first thing I will say is I am not the “points guy” for e-commerce. I, like you, am being screwed by these companies.Most Americans are balancing trying to get a good deal with figuring out how much time they could possibly spend on not getting ripped off.So I updated how I comparison-shop. I look at brick and mortar, on the app, logged in, logged out. I try not to buy in-app.I run experiments. Call your friends and say: “What price are you seeing?” My husband and I sit in bed with our laptops open, figuring out which of us gets the better deal. Whoever gets the better deal buys the plane tickets.One thing I often hear from readers is “nothing is ever going to change” – a sort of pessimism about reforming the system.I do think the deck is stacked against us and we have our work cut out. It feels like whac-a-mole – you get a win in one city, you find out your bill is vetoed in another.[Colorado Governor] Jared Polis vetoed surveillance pricing legislation. We’re still waiting for [New York Governor] Kathy Hochul to sign a bill that passed there.But when Americans find out that companies are partnering with AI companies to spy on you and figure out how to take your last three pennies for every item in your grocery cart, they get pretty ticked off.I think the optimism I have is the sort of public anger, and, frankly, the groundswell of public conversation around this.The Federal Trade Commission is sorting through about 1,000 comments from Americans about surveillance pricing regulation.Wendy’s had to cry “uncle” and say they wouldn’t do surge pricing on their electronic menu board. Delta cried “uncle”, and so did Instacart two weeks after Groundwork exposed their algorithmic pricing experiments.I think all of that is a really important part about how we stick the genie back in the bottle, combined with legislative activity.If Democrats take the House and Senate, there’s a long list of things they are expected to address related to the Trump administration, national security et cetera. Where should this be on the priority list?The top issue for the American people, and it has been this way since 2022, is prices and the cost of living. Anything that takes on the economy is going to be top of the list.The only that could shift could be rising concern about AI – and a lot of the most sinister nefarious and opaque pricing practices that corporate America is using are powered by AI.We’re seeing interest from Republicans as well. I testified in front of [Missouri Senator] Josh Hawley on this a couple weeks ago, at his request, as a majority witness, which has never happened to me before.You ask readers to repeat “It’s not your fault” three times before they try to confront this new landscape. Why?From the bottom of my heart, I don’t believe it should be Americans’ job to duck and dodge and beat the machine. The most dystopian version of this world is one in which there’s a “points guy” for everything.Outsmarting price-gouging on your own is like trying to solve climate change by yourself.Gougers are always reinventing themselves, always figuring out newer, more cunning ways to stay one step ahead. And all that effort eats up one of your most precious resources: time. Companies know this – and they are banking on it.What are you hoping to change, near term?It’s been a really long time since the consumer laws have been updated. I do think e-commerce and agentic commerce begs a new type of policy regime.This year alone, there are 90 pieces of legislation throughout the country, in states and cities to try to curtail algorithmic price fixing. A cost of living crisis is the right time to build the constituency for a revived consumer movement in this country.