Tinder has come under scrutiny for charging users vastly different prices for its premium subscription service, Tinder Plus, without informing customers. This came after Australian consumer advocacy group Choice recently filed a complaint with the Australian Competition and Consumer Commission (ACCC) to investigate the company for potential breaches of the Australian Consumer Law.
Choice explained in an article on its website that Tinder does not make clear that it uses consumers' data to set personalised prices. The consumer advocacy group conducted a mystery shop between the last week of February until mid-March, engaging 60 individuals to sign up for Tinder to find out more about the app's prices in Australia. The shoppers logged in based in gender, sexuality, location and age group. For age group, the ranges were 18 to 29 years old, 30 to 49 years old, and over 50 years old. According to Choice, the mystery shoppers were asked to take screenshots of the prices of Tinder Plus and their profile information.
The investigation found a huge difference between the lowest and highest price. According to Choice, a straight male over 50 years old residing in a metropolitan area was charged about US$24 for one month. This was almost five times as much as a queer female below the age of 30 years old in the same area, who was charged US$5.
On average, individuals over 30 years old were charged more than double that of individuals below the age of 30. Choice explained in its article that there were also, however, large price variations within these age groups. This ranged from about US$5 to US$12 in the under-30 segment, and about US$10 to US$24 for those over 30 years old. Choice said it did not see a pattern that could explain these differences.
According to her, it is "really concerning" that consumers do not know what information Tinder is using to determine these personalised prices. She added that without knowing what factors influence the prices individuals get for Tinder Plus, customers are not able to compare prices with other services and cannot judge whether Tinder is unfairly discriminating. “When we contacted the company and asked them how they set their prices, and why they charge people different rates, we were met with radio silence," Turner said.
In a statement to Marketing, Tinder's spokesperson said the app is free to use and the vast majority of its members enjoy the app without upgrading to the paid experience.
"However, we do offer a variety of subscription options and paid a la carte features designed to help our members stand out and match with new people more efficiently. Tinder operates a global business and our pricing varies by a number of factors. We frequently offer promotional rates - which can vary based on region, length of subscription, bundle size and more. We also regularly test new features and payment options," the spokesperson said.
Meanwhile, Tinder settled an age discrimination lawsuit in California last year, which involved users over 29 years old in the state paying double of what younger individuals were for the Tinder Plus. The users will be compensated a total of US$23 million in a combination of cash, app subscriptions and extra "super likes".
When Tinder Plus was first introduced in 2015, Tinder told US-based National Public Radio that it has tested Tinder Plus extensively in several countries and that it has priced the function based on "a combination of factors". These included what it has learnt through its testing. Quoting a Tinder spokesperson, NPR said the price points "were adopted very well" by certain age demographics and that many products offer differentiated price tiers by age. The spokesperson cited Spotify having student pricing as an example, adding that younger users are more budget constrained and require a lower price to jump in on the function.
Join us on a three-week journey at Digital Marketing Asia 2020 as we delve into the realm of digital transformation, data and analytics, and mobile and eCommerce from 10 to 26 November. Sign up for early bird tickets here!
Tinder tests video calls as it continues to rake in app revenue
Tinder steps up on safety, adds 'silent bodyguard' in app
Paris 2024 Olympics logo mocked: Better suited for Tinder or L'Oreal maybe?
Tinder to launch its first scripted video series as part of original content drive