The Hidden Cost of Overpricing Captive Customers

In a recent LinkedIn post, Dan Gingiss, CSP discusses how steep prices can damage customer loyalty when buyers have few alternatives. This article examines Gingiss’s post and the customer experience argument he makes; it is journalistic coverage, not an article written by him.

“The next day, I decided to drive to a nearby Starbucks instead. The same coffee was $4.95.”

When convenience comes at a premium

Gingiss opens with a hotel Americano priced at $10, then compares it with a $4.95 Starbucks coffee nearby. The contrast gives his argument a concrete starting point: even a customer who accepts that hotels may charge more can be surprised when a familiar purchase costs roughly twice as much.

He connects the coffee to other examples of high prices: a $5 in-room K-cup and a car dealership charging $10,000 above sticker during the pandemic. In Gingiss’s account, each illustrates a business charging more because circumstances give customers limited choice. The post does not treat those situations as identical; instead, it uses them to raise a broader question about what customers take away from a price that feels opportunistic.

Price shapes the customer relationship

Gingiss distinguishes between discounting to attract attention and raising prices when customers are effectively captive. He says competing on price through discounts can become a race to the bottom, while also arguing that price remains important when alternatives are scarce.

“Even with a captive audience, you risk both negative feelings and suspicion that there might be other places where you’re trying to take advantage.”

That warning is central to the post. According to Gingiss, a customer may remember more than the immediate charge: the price can prompt suspicion about how the business treats customers elsewhere. The concern, then, is not only whether a buyer can pay, but whether the transaction leaves them feeling respected.

Short-term revenue versus long-term loyalty

Gingiss’s conclusion is a practical caution for businesses weighing a sharp price increase. A captive audience may make a higher charge possible in the moment, but that does not guarantee the decision will support repeat business or trust. He urges companies to consider the effect on long-term loyalty before setting a price simply because customers have little choice.

“The short-term profit probably isn’t worth it.”

The post offers no pricing formula or estimate of how much loyalty a business might lose. Instead, Gingiss frames the decision as a customer experience judgment: immediate revenue should be weighed against the lasting impression a price creates. His hotel coffee example makes that trade-off easy to picture—and leaves businesses with a question about what a customer will remember after the purchase.