'Surveillance pricing' law won't work

New York has become increasingly expensive. The 2024 and 2025 elections made clear that regardless of where people may fall on the political spectrum, they are concerned about affordability and want their elected officials to take action.

With that in mind, leaders in Albany are considering policies aimed at lowering costs. While certain initiatives are sure to be effective, some are misguided and will not actually accomplish the intended goals. The proposals most likely to backfire are the state’s attempts to regulate "surveillance pricing."

Surveillance pricing uses personal data and algorithms to set higher prices for individual consumers. To be clear, the Retail Council of New York State — representing independent stores and national brands — would support legislation prohibiting the use of surveillance pricing to automatically increase the cost of products for specific customers. We are, however, strongly opposed to the current bill, which would effectively limit a retailer's ability to lower prices for New Yorkers.

If lawmakers approve the legislation, stores would be prohibited from offering certain discounts and loyalty programs to state residents. Specifically, the proposal would make it illegal for a retailer to send customers an email with additional discounts if they leave a website or app with products still in their online shopping carts. It would also prohibit retailers from offering standard promotions — a 20% off coupon to teachers or veterans, for example — without providing legal disclosures in advance. These are just two scenarios that demonstrate how the current legislation would make it extraordinarily difficult to provide discounts to consumers in New York — perplexing when the goal is to lower costs and make the state more affordable.

Policymakers are also considering a proposal that would prohibit stores from using electronic shelf labels. This technology is used to improve price accuracy and reduce waste generated by paper displays. Contrary to certain misinformation, electronic shelf labels are not equipped with cameras, do not collect personal information, and do not change prices based on the individual.

In an intense competitive environment, using these shelf labels allows New York stores to be more efficient. The reality is that online merchants, gas stations and food service establishments have used digital price displays for decades, and their use in a store setting helps modernize operations. On behalf of brick-and-mortar stores, we encourage lawmakers to consider legislation that would help local merchants remain competitive, rather than prohibiting technology that enhances pricing accuracy and allows employees to focus on more meaningful responsibilities such as customer service.

It is understandable that New York policymakers are attempting to do everything in their power to reduce the cost of living, but the specific bills under consideration will not work in practice. Offering discounts is an important way for brands to connect with customers and compete effectively, which benefits the public. Using electronic shelf labels simply allows stores to adapt in the modern economy.

In the context of a true affordability crisis, we cannot enact misguided laws that run the risk of making things worse. For that reason, lawmakers should reject the current proposals. Discounts and loyalty programs should not be limited because of bad public policy.

This guest essay reflects the views of Melissa O'Connor, president and CEO of the Retail Council of New York State.