The Fair Price Protection Act aims to tackle so-called surveillance pricing, where companies use data such as browsing habits, location information and purchasing history to adjust prices for individual consumers.
Supporters argue the practice could allow businesses to charge some shoppers more based on their personal profiles.
Sherrill said after signing the legislation: "New Jersey families are already feeling the pressure of higher costs. The last thing they need is companies secretly using their personal data to charge them more than someone else for the exact same product."
She added: "If businesses want to compete, they should do so by offering better prices, not by finding new ways to squeeze shoppers. This law puts New Jersey shoppers first by protecting their privacy and ensuring fairness in pricing."
The legislation follows similar bans introduced in Maryland and Connecticut, while New York lawmakers are considering their own restrictions on personalised price manipulation.
Under New Jersey’s law, businesses cannot use consumer data to set individualised prices for groceries and other essential goods. However, it does not prevent companies from offering loyalty programmes, coupons or other discounts available to customers.
The law also introduces a one-year pause on the rollout of new electronic shelf labels while the New Jersey Innovation Authority examines their potential impact. Existing electronic shelf labels can continue to be used, repaired and replaced during the review period.
Ademola Oyefeso, vice-president of the United Food and Commercial Workers International union, welcomed the move, particularly the restrictions on electronic pricing technology.
Oyefeso said: "The law’s moratorium on the use of electronic shelf labels is an important step to ensure this technology does not harm New Jersey shoppers or workers.
She added that the measure could encourage more states to act against pricing systems driven by artificial intelligence.
The debate over surveillance pricing has intensified as retailers increasingly adopt data-driven tools and AI systems. Supporters say personalised pricing can improve efficiency, while critics warn it could reduce transparency and allow companies to exploit consumers’ personal information.
