Often, the best way to avoid a rip-off is to know what others are paying for things. What did the guy sitting next to me on the plane pay for his ticket? How much did the neighbor pay for his kid’s wedding? That emergency dental procedure? The water pump replacement on her late-model foreign car?
Retailers use big data to maximize revenue—that is, to take as much of your money as they can. Why shouldn’t you have the same power?
Increasingly, websites and apps are giving consumers access to incredibly detailed aggregate price information, holding out the promise that the scales of bargaining power might tip back their way. There are now hundreds of online tools—most of them unbiased and data driven—that tell consumers the prices others have paid for everything from flowers to bathroom renovations. Enter a ZIP code, select a few criteria and faster than a shopkeeper can say, “High profit margin,” you can say, “Not so fast!”.
The price calculators—many are called “cost estimators”—are fun to play with, but they pack a real punch. None of these tools will prevent a bait-and-switch estimate, or keep you from getting nickel-and-dimed. But they do something just as important: They give you a reference point (what economists call an anchor) so you always know you are in the right ballpark, if not sitting in the right seat, when paying for something.