Clean Up on Aisle Algorithm: Seattle Bans Personalized Grocery Pricing & Discounts

by: Rosanne Yang

On October 5, 2026, Seattle adopted Ordinance 127515 (Council Bill 121267), joining Maryland, Connecticut, and New York in regulating personalized pricing.  Seattle’s ordinance bars large grocers and mixed-use stores, as well as delivery platforms, from using shoppers’ personal information to set prices and offer discounts. The ordinance takes effect September 1, 2027.

Importantly, this ordinance also provides a private right of action, with express anticipation of class actions, and liquidated damages, which means that it will be a magnet for enforcement.

The ordinance is consistent with other surveillance pricing legislation only in its inconsistency with anything else.  Every jurisdiction is putting its own spin on the requirements and using its own terminology (here, “algorithmic-based price discrimination”).  This makes it all that much harder for a national retailer or delivery services to comply.  We will try to simplify.

1.        Are You Subject to the Law?

The following businesses are subject to the law:

• Grocery businesses. A Seattle store with 10,000+ square feet that primarily sells groceries, belonging to a business with 20 or more retail locations globally.

  • Impact:  Banned from personalizing the price of any goods you sell, grocery or not.

• Mixed-use grocery businesses. A Seattle store that is not primarily a grocer but devotes 10,000+ square feet of its sales floor to groceries (regardless of how many locations you have globally).

  • Impact:  Banned from personalizing the price/discount of groceries, diapers, grooming and hygiene products, and over-the-counter drugs.

• Delivery service providers. Any organization employing 100+ employees globally and facilitates online ordering and/or delivery from a grocery business, mixed use grocery business, or a warehouse to consumers in Seattle.

  • Impact:  Banned from personalizing the prices/discounts on any goods from grocery businesses, regardless of the number of stores the grocer operates; or groceries, diapers, grooming and hygiene products or over-the-counter drugs from mixed use grocery businesses and warehouses.

Small grocers should take note of that last bullet point. A two-store independent grocer, even one with large stores, sits outside the ordinance. However, the platform delivering its groceries does not.

2.        What Is Prohibited?

The prohibited practice is “setting, altering, or manipulating the price of goods offered to a consumer or a segment of consumers, based in whole or in part on monitoring, tracking, or automated analysis of the consumer’s behavior, location, demographic characteristics, biometric data, or other personal information.” The prohibition includes “offering random variations in prices to different consumers.”

This means that some A/B testing is in scope, as are electronic shelf labels that have consumer-based, dynamic pricing capability (noting that, although expressly referenced in the ordinance, today’s electronic shelf labels may not yet be capable of this kind of adjustment).

3.        What Are the Exclusions?

The following practices are excluded from the prohibition:

• Delivery cost differences, where location is the only personal information used.

• Store-level prices available to everyone at that store.

• Manufacturer or third-party funded coupons, if personal information plays no role in setting or targeting them.

• Retention, win-back, and cross-sell discounts offered on equal terms to similarly situated consumers.

• Group discounts on equal terms with openly disclosed eligibility criteria.  For instance, a mailing list sign-up; broadly defined groups such as teachers, seniors, military, and students; and loyalty programs, priced either the same for all Seattle members or in tiers based only on prior purchase history, never individualized and never combined with other personal information.

Security and loss-prevention technology remains lawful, provided nothing it collects feeds pricing.

4.        Enforcement

As indicated at the outset, the ordinance provides a private right of action, including class actions.  Consumer waivers are void as violative of public policy.

However, it is important to note that while all covered “mixed-use grocery businesses” and delivery service providers are subject to private enforcement, some covered “grocery businesses” escape private enforcement.  A private right of action can only be brought against a “grocery business” that owns or controls 25+ “grocery establishments” in the state of Washington.  It is not clear why there is a different standard here, or what a “grocery establishment” is.

Prevailing plaintiffs may recover:

• Attorney fees and costs.

• Legal or equitable relief, plus interest at 12 percent per annum.

• Civil penalties up to $3,000 per aggrieved party and up to $10,000 for each subsequent violation per aggrieved party, capped at $1 million per action (each, as adjusted annually for inflation).

• Liquidated damages up to $10,000 in place of actual damages that are hard to prove.

In addition, the City Attorney may recover the same amounts that private plaintiffs can recover, but there is no $1 million cap.

Covered entities are required to maintain records for 3 years, and the failure to do so results in  presumption that the ordinance has been violated, which can be overcome only with clear and convincing evidence (which will be hard to do if there are no records).

5.        Steps to Prepare

We may sound like a broken record here, but it bears repeating that the best things that any covered retailer can do now are these:

1. Establish its base prices properly.

2. Determine how personal data is used to affect its prices and discounts.

3. Plan new approaches if needed.  September 1, 2027 will be here before you know it, and laws in other states relating to personalized pricing are already in effect (Maryland and New York) or will be earlier than Seattle’s ordinance (Connecticut – July 1, 2027).

For more information about other personalized pricing laws, and the FTC’s proposed enforcement policy, see our previous articles here  and here .

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE. This summary does not constitute legal advice.