US states are increasingly targeting "personalized pricing," where companies use data to offer different prices to customers. New York's legislature recently passed the One Fair Price Act, which Governor Kathy Hochul is now considering. This follows Colorado Governor Jared Polis vetoing a similar bill, noting it "would punish differentially lower prices, not just higher prices." This move risks eliminating discounts that benefit budget-conscious shoppers.

Economists argue that banning personalized pricing, or "price discrimination," could harm consumers by removing options like student discounts, senior fares, and coupons. These practices, while allowing some to pay more, also enable others to pay less. The fear is that algorithms will charge everyone the maximum they're willing to pay, but evidence from the Federal Trade Commission suggests more research is needed. Without personalized options, a single, potentially higher, price could prevail for all.

Historically, discounts required effort, like clipping coupons, serving as a barrier for those who didn't need the savings. Modern algorithms can achieve similar customer segmentation with less waste. While transparency concerns about algorithms exist, making low prices universally visible negates their purpose as discounts. New York's proposed ban, by promising a single price, risks eliminating those crucial lower options for many.

Colorado's approach of vetoing the legislation appears more pragmatic. The One Fair Price Act in New York, while aiming for uniformity, fails to account for the vital role of targeted discounts in serving diverse consumer needs. Eliminating these practices could leave vulnerable shoppers worse off.