While dynamic pricing can be a powerful tool, it must be used carefully to avoid potential pitfalls. One risk is alienating customers who may feel that pricing is unfair if they notice significant price fluctuations. Transparency and clear communication are crucial to prevent damage to your brand's reputation. Additionally, incorrect implementation can lead to pricing errors, which might either erode profit margins or cause loss of sales. It's essential to have robust systems in place to ensure accurate pricing adjustments.