If you feel like you have no idea what anything's supposed to cost anymore, you're not alone. The pandemic and subsequent bout of inflation sent prices all over the place, and now we're facing down whatever is going on with tariffs at any given moment. Unfortunately, our collective state of sticker "Huh?" is likely to get worse. Thanks to a whipsawing economic landscape and the magic of technology, prices can change faster than ever — the price you see in the morning may not be the same that same afternoon. Maybe that new price tag is the result of changing supply and demand dynamics. Maybe it's tariffs. Maybe it's corporate funny business. The unfunny part is that it's impossible for many consumers to know.

You might remember the brief dustup around Wendy's and dynamic pricing last year. Its CEO said on an earnings call that the company was going to test out price variations and AI-enabled menu changes, and the internet did a little bit of a freakout. The episode was a sign of the times: Rapid-fire price changes are everywhere. Thanks to digital price tags, QR codes, and the shift to online shopping, it's easier than ever for companies to move prices at the drop of a hat. The pandemic helped firms get more agile at reacting to shocks to the system. Instability represents a prime opportunity to make adjustments, including to a business' benefit.

"Given this really uncertain, volatile environment, if you're a company who's been thinking of doing dynamic pricing, it could be a good opportunity," said Z. John Zhang, a marketing professor at the University of Pennsylvania's Wharton School of Business who studies pricing strategies and targeting. "This could be a good occasion, a good excuse, an alibi for them to move in that direction."

It used to be the case that dynamic pricing — meaning the price of something moving up or down based on market conditions — was largely reserved for flights, hotels, and Ubers. Consumers didn't love the idea their airfare in July was going to run them double what it would in February, but they got it — thus are the rules of supply and demand. But variable pricing is creeping across the economy, including places where it feels a little less understandable. Now, we're in a super-dynamic environment, given the uncertainty emanating from the White House and the global economy. In turn, it's a moment for a super-dynamic approach to prices.

Volatility is always a part of business, but now we're facing a "trifecta of volatility," said Craig Zawada, chief visionary officer at Pros Holdings, a price optimization company. First, costs are changing quickly — in the past_, a company might negotiate once or twice a year with a supplier, but now they're having to review their agreements all the time. Second, competitive fluctuations are happening. Businesses in the same industry tend to have similar inputs, but not always. If the guy next door imports from China and you don't, you've got an advantage, but if you see them increase their asking price, do you bump yours up a little anyway? Third, consumer demand is shifting, and not always in ways that are obvious or predictable or even bad. In times of economic precarity, sales of items such as lipstick and mini bottles of alcohol tend to go up.

"All of those dynamics, in this volatile environment, if you're thinking about it as a business, how do you thrive? How do you do better? You need to understand all of those things," Zawada said. "That's where technology comes in. It's much easier now to have visibility on costs, see the reactions to the market, and then respond with prices."

Customers recognize how volatile things are and may expect price changes. The willingness to accept these adjustments makes it easier for businesses to do some resets and expand their margins in competitive areas to get more breathing room. This is the type of margin-padding some companies did during this more recent episode of inflation. And if customers reject the increases, businesses can see that, too.

Shikha Jain, the lead partner for consumer and retail for North America at Simon-Kucher, a business consultancy, said that determining the price of a good is a lot more than just picking a number.

"What does it do for consumer demand? How do we balance acquisition and retention? What does that mean for our internal balance sheet and cash flow in terms of our P&L," or profits and losses, she said, "and what does it mean from a competition and market landscape standpoint?"

She pointed out that companies have gotten better at figuring all of this out in recent years, especially in the wake of a pandemic that was wildly disruptive to supply chains and consumer behavior across the globe. "We haven't had a stable environment in a long time," she said.

Consumers do not like dynamic pricing, even if it sometimes works to their benefit. Happy hour is dynamic pricing, as are early-bird specials, last-minute flight deals, and flash sales. But to many people, costs constantly moving up and down feels manipulative. They're suspicious it's going to actually work in their favor.

It's also the case that dynamic pricing isn't really designed to handle what's happening now. It's usually about supply and demand — that Saturday night taxi being a much hotter commodity than the same one on a Sunday at 2 p.m. — not about whether the president of the United States will jack up the price of everything coming out of China.

"This is a completely different situation, where you are looking to government policy and how that could change very quickly and how you would change your prices in response," said Eric Greenleaf, a marketing professor at NYU's Stern School of Business who researches pricing.

Businesses that sell online can change prices quickly, or just ride the wave of the Amazon algorithm. Some supermarkets and big box stores, such as Walmart, now have digital price stickers that can be adjusted in real time. Consumers are likely to be somewhat understanding that companies aren't having a good time with tariff-by-tweet. One risk businesses face in using slick dynamic pricing tactics, however, is that customers may view it as a little too slick. To blunt any backlash, they may want to pass the buck a bit. So the next time you go to the grocery store to pick up your favorite coffee brand, and it seems pricier than you remember, maybe there's a little asterisk next to the price tag that reads, "*This price increase was brought to you by President Trump, not me."

"There'll be a lot of firms, and this is easier online, where they can literally say: 'Here's what we wanted to charge you. Here's the tariff. Here's the total price that you're paying,'" Greenleaf said. "Of course, that will probably upset the Trump administration, but businesses want to make clear that they're not profiting off of this."

It's not that different from restaurants slapping on egg surcharges earlier this year. Were wholesale eggs more expensive? Yes. Was it easy for customers to wonder whether they were justifiably 50-cents-an-egg-at-Waffle House more expensive? Also yes. But Zhang, from Wharton, said a tariff surcharge may be a better way to go for businesses than plugging tariffs into whatever pricing algorithm. They can take it off once the tariffs go away, and it's easier to calculate than whatever incremental adjustment happens across the supply chain. Plus, he said, "You can just blame Trump."

Not knowing who's to blame is, of course, part of the problem from a consumer perspective. And just because tariffs go away and companies cool it on all the price changes doesn't mean the sour taste it's left in people's mouths will fade so fast.

"Whereas tariffs can change rather quickly, consumer optimism takes longer to recover," Greenleaf said.

Consumers are exhausted. The past five years have been filled with upheaval, and the chaos feels unrelenting. It's understandable people just want their shampoo to cost whatever it costs, no games. But the economy is increasingly gamified, including on pricing, whether or not people want to play.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.

• Airline rewards programs have faced scrutiny over dynamic pricing and devaluation practices.
• Frequent flyers feel burned as airlines adjust rewards, and the DOT is investigating.
• Dynamic pricing can affect point values, leading some customers to prefer cashback over miles cards.

Sean Brown, 46, has logged close to 2 million miles on Delta, his preferred airline. But his loyalty is waning as dynamic pricing and devaluation practices have made their way to airline rewards programs and left some customers feeling burned.

"Unfortunately, there's been a pretty seismic shift in the industry," the healthcare IT executive said, adding, "That has really not sat well with me."

For years, some customers have forgone cheaper or more convenient flights from other airlines so they could earn points and perks with their preferred brand. Frequent flyers would get rewarded for their loyalty with predictable exchange rates to turn points into more flights, seat upgrades, and lounge access, among other perks.

But as air travel ramped up and more and more customers got in on the points grind airlines have gotten much more flexible about how they value rewards, offering some for cheaper and some for much more.

It's caused some previously loyal customers to jump ship — and even Washington is stepping in. In September, the Department of Transportation announced it was investigating major airlines' reward devaluation and dynamic pricing practices.

Secretary of Transportation Pete Buttigieg told BI he wants to understand the effect that these programs have on competition, and whether they're dissuading customers from getting the best price.

"One of the biggest concerns is devaluation. So the points are worth something one day and something else," Buttigieg said. "Another is some of the hidden pricing where the value of rewards is unpredictable or is concealed."

For Brown, the calculus has already shifted from spending on his preferred airline to whatever gives him the best value.

"I'll just tell you, the sentiment in the plane — doesn't matter where you sit if you're in the front, the middle, or the back," Brown said, "everyone is pretty pissed off at the fact that they're getting gouged left and right."

How points changed

Concern with how airlines calculate, redeem, and communicate about rewards points has reached Capitol Hill.

In May, Consumer Financial Protection Bureau Director Rohit Chopra and Buttigieg held a joint hearing on airline and credit card rewards. They wanted to investigate how credit companies might be devaluing their rewards or using what the CFPB called a "bait-and-switch scam" to lure in customers.

"Our initial review of the fine print suggests that credit card companies and airlines have the power to quickly and dramatically devalue those points by making it more challenging to redeem them or by limiting the inventory that can be purchased with points," Chopra said in prepared remarks.

Buttigieg said he's not interested in telling airlines or credit cards how to run their programs — instead, he just wants to ensure that they're transparent, consistent, and fair. He's also trying to figure out how to put his points to use: He and his husband want to use points toward a family trip after his job with the Biden administration winds down.

But his points may not hold the same value as they used to. Brett House, a professor of economics at Columbia Business School, said that airlines "have progressively rejigged their frequent flyer programs to require higher and higher bars to get access to clubs and other amenities or privileges that those programs provide."

It's a confluence of several different factors. First, to attract more customers after the 2020 slump, credit card companies issued all kinds of new perks and ways to earn points, such as higher sign-up bonuses or more points on things like restaurants and food delivery. On average, sign-up bonuses were worth $326 in 2022 — a nearly 20% increase in value since 2019, the CFPB found.

In response, customers hoarded those points, using their balances as a savings account for future travel. The CFPB found that by 2022, cardholders had an average of $156 worth of untouched rewards.

But with appetites for flights high in the wake of the pandemic, Gilbert Ott, the director of partnerships at the travel platform point.me, said there was a "logjam" — due in part to airlines struggling to scale back up again.

"When flights were coming back, they were completely full," he said. That made it a tough sell to convince airlines to make more point seats available, Ott said. To sell a seat for points, rather than cash, it really needed to be worth their while.

Enter: Dynamic pricing.

Airlines have long used fluctuating pricing strategies, but applying them to points and rewards is more recent. The practice has spread to other industries to help companies continually adjust to the highest price customers are willing to pay based on various factors like timing and demand.

American Airlines told BI that dynamic pricing allows them to offer some flights at lower rates. It does seem to work that way sometimes: As The Wall Street Journal reported, the lowest award flight cost on the carrier dropped after it rolled out dynamic pricing.

Delta, Southwest, and American all noted that they offer no blackout dates for rewards. Southwest said that it will continue to offer "uncapped reward seat availability and points that don't expire." A Delta spokesperson said that members can redeem points for things beyond vacation and flights, including premium drinks in its Sky Clubs, cheaper seat upgrades, and checked bags.

All of this adds up to a lot of guesswork in the points game. As Buttigieg notes, airlines used to provide charts showing just how much a flight would cost in points.

"I do think it's an interesting question to consider: Should there be some publicly sponsored source of information that at least tells you what you can expect from the airlines?" Buttigieg said. "But honestly, right now, it's so complex and convoluted, I'm not even sure such a thing is possible."

American told BI that it's "the only major U.S. carrier to continue offering an award chart to help guide members in mileage redemptions," and a search of other airlines did not turn up results for any others.

United reportedly got rid of its chart in 2019, and Delta reportedly pulled their chart even earlier. A United spokesperson said that since it moved to dynamic pricing in 2017, roughly half of its customers have gotten flights "for fewer points than our fixed award chart offered."

A rollercoaster of rewards' values

Thanks to dynamic pricing, depending on demand or timing, a flight might cost 500,000 points on some days and 50,000 on others. By one measure, the average economy rewards prices across almost every airline have risen since 2019.

An analysis from IdeaWorks found that, on average, mileage and point prices have risen by 28% since 2019. But there are still deals to be found. Ott's point.me compares points' values across different airlines and rewards programs. Dynamic pricing, he said, has brought some redemption costs down.

"There are some airlines that charge far less now in economy and just a little bit more in business," Ott said. "But because of the dynamic pricing, you have dates that are 500,000 points and a million points — because there's a seat now available with points on every flight, and there's only some dates where the lowest prices are available. "

For Meir Statman, a professor of finance at Santa Clara University and author of a book on financial behavior, the points game is getting "entirely iffy" and he has moved away from miles cards entirely — instead, he wants cash back.

He's not alone. While airline credit card rewards remain popular, cashback rewards have become the leading motivator for consumers to open new credit cards, per a report from EMARKETER.

J.D. Power's 2024 US Credit Card Satisfaction Study found that most cardholders are using cashback cards — consumers said that they were opting for the cards due to their lack of fees and were using the cashback rewards more frequently as a credit on their monthly statement.

"People figure out that those points for miles are not worth it, Statman told BI, adding, "When I'm getting a thousand miles and I thought that it was worth a cent per mile and now I find that this is worth, God knows what, but surely less than a cent per mile, I may as well get 1% in the form of a dollar than in the form of a mile."

Are you giving up on points or loyalty rewards? Contact this reporter at [email protected].