FTC Probing Allegations of Amazon's Deceptive Discounting (reuters.com) 104
An anonymous reader quotes a report from Reuters: As part of its review of Amazon's agreement to buy Whole Foods, the Federal Trade Commission is looking into allegations that Amazon misleads customers about its pricing discounts, according to a source close to the probe. The FTC is probing a complaint brought by the advocacy group Consumer Watchdog, which looked at some 1,000 products on Amazon's website in June and found that Amazon put reference prices, or list prices, on about 46 percent of them. An analysis found that in 61 percent of products with reference prices, Amazon's reference prices were higher than it had sold the same product in the previous 90 days, Consumer Watchdog said in a letter to the FTC dated July 6. Amazon said in a statement that Consumer Watchdog's study was "deeply flawed." "The conclusions the Consumer Watchdog group reached are flat out wrong," Amazon said. "We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers."
They do what every other retail store does... (Score:5, Insightful)
They do what every other retail store does for discounts.
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you ain't shitting any. the local grocery store chain does this in spades... ridiculous high "regular prices" published in ads that are way higher than the actual "shelf price" ever was... and when they do follow the "letter of the law", they mark up items, waaaay up, the week before a % off sale which ends up being close (and sometimes even still higher) to what the old shelf price was. fucking crooks, the whole lot of them. one thing is for certain, those bastards will never violate our state's minimum m
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It's even got a name - price establishment.
Specific Example (Score:1)
According to my receipt, Washburn Mills Chickpea Rotini on Amazon was $12.48 on Friday June 30th.
A few weeks later, Chickpea Rotini was ~$18.99.
Today it costs $24.97 [amazon.com].
Why the 100% increase in less than 30 days? Could it be that Sam's Club [samsclub.com] and WalMart [walmart.com] stopped carrying it?
Maybe Amazon is taking a page out of WalMart's playbook. Undercut prices until the competition gives up, then raise them to any level that consumers will pay. If this is the overall pattern, then it is an abuse of a monopoly.
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Re:Specific Example (Score:4, Informative)
It's almost as if when the supply of something goes down the price goes up. If only economists had realized this earlier...
Flat out something (Score:5, Insightful)
"Prices found" does not equate to sales prices.
Some countries with actual consumer protection requires "before" prices to be a price that had multiple actual sales to unaffiliated entities, not just what it was announced at or sold internally at.
If I announce my fridge for sale for $50,000, and next week for $150, that's not a $49,850 discount.
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Amazon usually shows list price with a strike-through, and then their price. Standard practice in the U.S. For some items, they show a stricken list price, a stricken retail price, and the current low-point price.
Re:Flat out something (Score:4, Insightful)
Is vendor selling it at list price? Don't buy from them.
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Great to meet another Android user. Welcome my friend.
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Best Buy tends to sell above MSRP. This was surreal when the price of a refrigerator I wanted was $1,300 refurbished, $2,200 new Home Depot, $3,000 MSRP, and $3,300 Best Buy.
Re:Flat out something (Score:4, Interesting)
This is also the case in some US states. For example, Los Angeles has figured out how to use California law on advertised discounts to chase down major retailers:
http://www.latimes.com/business/la-fi-retailers-lawsuit-20161207-story.html
Given this announcement from FTC, I have to wonder if the 2016 round of unlawful discount litigation was just the preseason; now everything's in place for attorneys to tap directly into Amazon's revenue stream.
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This is also the case in some US states. For example, Los Angeles has figured out how to use California law on advertised discounts to chase down major retailers
Yes, but unfortunately, there are loopholes, like:
My store sets a ridiculously high sales price on a TV.
Me and my wife buys one each, then return them a couple of weeks later for a full refund. In fact, some buyers do this on a regular basis to get a new gadget every few weeks. Most stores hate those customers, but some stores welcome a low number, because they can be used to fix the "before" price. Some sucker will buy the open box item at just 10% above market price, because it's a 30% "discount".
For t
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The easiest way to write a good regulation about this would be simple for anyone familiar with statistics: The MAXIMUM price that can be advertised as the basis of any current sale or discount is the modal price when calculated over all sales of the same product in the 90 days prior to the advertisement.
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Basically it sounds like Consumer Watchdog wants Amazon to incorporate camelcamelcamel's price history directly into Amazon. While that would be convenient (I have the extension on my main browser, but not on every browser like my phone), I don't see why Amazon should be singled out with this requirement when no other store has to do it.
That can still be gamed.
What if the CEOs of two stores in, say, Delaware, each have the store buy a thousand $3 fidget spinners at $30 from each other? When they then sell them for $9.99, reduced from $30, they take the $20.01 off as losses against the $27 gain from the first sale.
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The tools are out there. It's up to the buyer to use them. Part of the free market is that people more concerned about saving money by cross-checking prices (poor peop
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Basically it sounds like Consumer Watchdog wants Amazon to incorporate camelcamelcamel's price history directly into Amazon. While that would be convenient (I have the extension on my main browser, but not on every browser like my phone), I don't see why Amazon should be singled out with this requirement when no other store has to do it.
In some countries, Amazon has to do the equivalent. So they already have systems in place that are working.
So this boils down to an argument of "it's unfair if I can't be deceptive in the US when others can". I don't think that's a good argument, and that Amazon would be better off in the long run supporting that everybody should be held to high standards.
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"So this boils down to an argument of "it's unfair if I can't be deceptive in the US when others can"."
I disagree, that is a great argument. I love the idea of solving problems. However on the rare occasion when we choose to persecute individual entities we give semi-legitimate examples of the government picking "winners and losers" for the conservative hyperbole
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availability of information. Information asymmetry, which is what you're advocating, makes free markets worse.
Normal (Score:3)
This is normal. During and after the Holidays, the so-called discounts are actually higher than on regular days. I live by the rule: Never buy discounted Items.
Re:Normal (Score:4, Informative)
I keep hearing this from crazy people, and it keeps not being true. I've worked in retail, but that doesn't matter; what matters is I've actually looked at prices for things, piled up loads and loads of shit I wanted to buy but didn't want to go $4,000 into credit card debt for, and so have frequently been watching when the prices drop for holiday sales and other bullshit.
The truth is they think a $5 flash drive that actually costs $15 and usually retails for $20 will get you in the store to buy a $500 TV that actually costs $400 and is marked down from its typical price of $529.99. They're still operating on the same NOP margin (in retail, that's often like 5%-8%); they're using seasonal hype and a loss-leader model to induce you to buy more so they can profit by volume.
Re:Normal (Score:5, Informative)
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Uh, no, it's not illegal in several states; the Federal Trade Commission has an entire publication on shit like that describing it as extremely illegal.
It's still legal to compare to the MSRP. This isn't "happening all over again"; it's a constant, and keeps popping up in fringe publications as quasi-tabloids here and there try to pawn off their supposed major discovery that musical instruments, cars, and major appliances are sold with "fake discounts" off an MSRP that nobody actually charges.
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Harbor Freight is in the middle of paying a settlement and is probably about to have to pay another settlement for their deceptive bullshit "compare to" prices, where they compare their shitty tools (some of which are still worth buying, mind you) to the MSRP of some Snap-On or Honda product which is provably better than their product in literally every way. And guess what? They're still doing it. I just found out about the settlement, there's two weeks to file, and I get ten bucks if I do. I probably will,
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It's best to use a service like CamelCamelCamel to view previous prices. They offer email notifications if a price drops below a threshold you set too, but be aware that they sell the thresholds you set to third parties. Not your email address or identity, just the threshold, so sometimes you will find that companies offer products at the exact price you wanted after setting one up.
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Is there a service that will just offer me an XML feed of prices from major retailers queryable by UPC Code, or some other unique identifier, so I can write my own daily query on a bucketload of products i'm interested in, and use my own threshold scripts and not reveal my thresholds to the service?
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There isn't any profit in that so probably not... But you could maybe write a scraper and make your own.
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Checking historical prices is always prudent
Fun fact: Amazon explicitely disallows price histories if they're being used in a comparison with other retailers.
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I live by the rule: Never buy discounted Items.
Here's a good rule, too: don't buy something if you think the price you are asked to pay is too high.
Under that rule, it doesn't matter what "list" or "regular" price a company puts on a product, it only matters what price they are asking you to pay right now. That means you might buy a fridge from A that was displayed as "regular price: $10,000, now only $1000" instead of from B that says "regular price: $3000, now only $1500".
What the FTC actually needs to look into is Amazon's practice of discounting
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That makes the "free two day delivery" that they sell as part of Prime membership a fraud.
No, charging for a Prime Membership makes "'free' two day delivery" a fraud. Discounting slow shipping is double-dipping.
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No, charging for a Prime Membership makes "'free' two day delivery" a fraud.
Free two day delivery is a fraud all by itself since it usually isn't two days, but that option is what you buy when you pay for Prime membership. What you are saying is like claiming that getting access to the United red carpet club after paying for a club membership is a fraud. It's what you are paying for.
The fraud is that you're paying for "free" two day shipping as part of the prime membership, and then being charged more for the item when you use two day instead of slow boat.
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but that option is what you buy when you pay for Prime membership
You do not buy free shipping. Free shipping is free. Prime gets you discounted shipping paid on an annual basis - calling it free in any way is fraud.
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If I pay for Amazon Prime, then each thing I buy must get to me in two days and must not cost me extra money per sale to do so.
Only one polysyllabic word in the sentence, and that's a proper noun. Clear enough now?
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That's not how free works. That's called discounted and prepaid.
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In some cases, it was paid by Amazon. The first book I ordered from Amazon was in my hands less than twenty-four hours from placing the order, which means that Amazon upgraded the shipping to impress a new customer. Right now, my wife pays money for Amazon Prime, which we use for shipping and video. There is no marginal cost to ship anything in two days. In neither case did people go to special effort out of the goodness of their hearts, but if we can't call that "free" the term loses its useful meanin
I really shop (Score:1)
I really shop around and compare prices. There are many times when it's actually cheaper to order a book from my local Barnes and Noble than buy it from Amazon - even if I can get free shipping. And B&N gets it to me in 3 days and I just pay list price - the price printed on the back cover of the book.
There are better stores than Amazon for electronics, computers and what have you.
Of all the different things I have purchased on Amazon, I have never seen what the complaint is accusing them of.
On the ot
Amazon Prime (Score:5, Insightful)
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You pay the inflated prices even if you're not a Prime member. It's fair game by FTC rules. I've noticed various retailers also will sell the same heavy thing for $20 + $23 shipping, or for $43 + $2.99 shipping. Needless to say, I am not happy about all the shipping I paid on my 50 pound bag of sodium percarbonate.
So yeah, we're aware Amazon charges higher prices to offset shipping costs. They just do it for everyone, regardless of shipping method or membership.
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Great, so now the only benefit of prime is shipping speed?
As a prime member; I feel cheated if they're raising prices on the items.
Maybe it's time I started shopping around at many online retailers for most purchases like I used to.
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When they started prime, it seemed obvious to me all they were doing was offering faster shipping and waiving the minimum purchase requirement of $25 to get 'free' shipping. They added streaming later, so there is that.
Funny thing is free super save shipping is back down to a $25 purchase again, so unless you buy low cost items every day or need it in 2-3 days, prime is useless except for their streaming service.
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so unless you buy low cost items every day or need it in 2-3 days, prime is useless except for their streaming service.
That's a little depressing, though. On the other hand, I perhaps spoke too soon about there being no other benefit.
It does automatically give me the Twitch Prime status, which eliminates ads from the platform..
I doubt the video streaming service justifies the cost. They're no NetFlix, and even NetFlix misses vital titles.
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Prime Video has more titles and lets you keep (and even download) what you buy. For people who rewatch mostly the same stuff, Prime Video is cheaper than Netflix + Prime. If you're getting the 2-day shipping from Amazon Prime anyway and not constantly watching new things, or just an intermittent viewer, it's not worth a Netflix sub.
I bought all of Babylon 5, Deep Space 9, RWBY, and Sherlock over like 6 years. I spent as much as I would on 2 years of Netflix. I also don't watch TV constantly.
Re: Amazon Prime (Score:2)
Free or cheap shipping doesn't exist. The effect is however psychological. You can't ship any package sub-$5, with Prime you pre-pay some of the cost and Amazon can thus give you better deals. I've found the difference between Prime and non-Prime accounts is usually in favor of the Prime account.
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Well, what about heavy things that cost a lot to ship then? Let's try Lodge Cast Iron [amazon.com].
It's $45.06 whether I'm on my phone or my computer, logged in or not, private or not, T-Mobile or Wifi.
Still the same.. still the same... the same for laundry detergent [amazon.com]...
Can you give an example? I've never been able to find one, and nobody's ever cited one; they just say that Amazon does it.
Re:Amazon Prime (Score:5, Interesting)
At least they're not quite as blatant as Walmart, who advertise free shipping, but offer you a $5 discount if you pick it up yourself.
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Yes - in other words, you pay more for the service that delivers it for you, and you only.
There's no denying that it's cheaper for the store to do it in the bulk-handling way, that doesn't mean that shipping is "free" though. They absolutely are charging more for the case where they deliver it to your door, just framing it as "have a discount if you don't want delivery to your door".
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At least they're not quite as blatant as Walmart, who advertise free shipping, but offer you a $5 discount if you pick it up yourself.
I'm sorry, but I think it is just as blatant for Amazon to advertise "free two day shipping" on a product, but then give an effective 50% discount if you use "no rush" shipping. That's after you've paid for a Prime membership to get the "free" two day shipping.
(Yes, a $10 item had "free two day", but they'd do free "no rush" shipping and throw in a $5 certificate for some other product.)
Re: Amazon Prime (Score:2)
Walmart, these days, is also offering a discount on things that are already on the shelf at the store if you buy them online and have them pull them from stock for you, vs selecting it yourself.
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Will they give me a discount if I don't wear a trenchcoat, a hat and dark glasses and cover my license plate with mud before I'm seen anywhere near a fucking Wal-Mart?
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Yes, as far as I can tell the discount applies to all creeds.
It's absurd, though. The other day I needed oil for my car, so (fucking yay) this means Walmart. I scoped out the prices of the other places that stock motor oil first, just to make sure that there wasn't a better price to be had (and there wasn't). So I get to the store and, lo! The shelf price of Mobil-1 is a dollar or so more than the online price (with "free pickup today").
It's cheaper for me, a consumer, to shop at home, pay in advance, a
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I wound up finding Mobil 1 online for the same price as Wally World, so I ordered it from someone else and it showed up at my door. Well, driveway.
About the only thing I'll still go to Wal-Mart for is truck batteries. Not car batteries, my car takes a euro battery that they don't carry.
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They also "guarantee" two-day shipping, but often don't meet the guarantee. The customer's recourse when this happens is to have the price of their shipping refunded, which is $0.
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They should really investigate Amazon Prime, they advertise "free" shipping, but inflate prices to account for shipping.
I've heard this a lot, but the Prime prices are still usually cheaper than or at least equal to what I'd pay at a local store, and I don't have to drive for 20-30 minutes to get it. Maybe that stuff was previously even cheaper on Amazon before Prime existed? That was so long ago I can't compare.
MSRP? (Score:2)
Be an informed shopper (Score:1)
So long as price tracking sites like https://camelcamelcamel.com are still allowed, I don't care what the main Amazon page lists as a base price.
Why stop (or start) here? (Score:5, Interesting)
The FTC could shut down virtually the entire retail furniture market. Instantly.
And that's not the only industry to examine in this manner. C'mon, man.
Comment removed (Score:5, Insightful)
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Somebody once told me "Stop determining value based on cost in dollars. Determine value based on time and effort. For example, if you make $25 and hour, and something costs $25, are you willing to work an extra hour to get it."
Completely changed my perspective.
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As the AC here pointed out, time is money. I set my hourly time outside of work at $50. That's what it would take to make me want to do something other than what I want to do.
I don't want to spend my time price-matching new screen protectors for my phone. They are like $10 on Amazon. I'd need to be buying a lot of like 50 of them before it would be worth my time to price compare. Same with many, many other products. So for those, I just buy them. Now, a new stove for the kitchen? You can bet I put
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The proper price in the free market is whatever you can get someone to buy it for without engaging in fraud.
FTFY
If I tell someone I'm selling a brand new computer with the latest hardware, and instead sell a box loaded with dated components from years ago, I'm engaging in fraud. While someone may have been willing to pay the price I set, my activity would neither be legal nor conducive to a healthy market. Likewise, I can't lie to someone by telling them that the item they're buying is discounted from a higher price when it was never offered at that higher price to begin with. There are laws in most jurisdictions
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Likewise, I can't lie to someone by telling them that the item they're buying is discounted from a higher price
The former problem is hard to solve on your own while the latter is trivial. Simply ignore any useless claims of what the higher price is or was.
You cannot ignore the statement that the components are brand new latest hardware because that is a significant part of the description of what you are physically buying. "Regular price" is a useless piece of data because it reflects a price you aren't going to be paying anyway, and doesn't actually describe the product you are getting. Why do you care if the widg
I believe it (Score:3)
Every time I decided to buy something on Amazon, I first search for it on Google to compare prices.
A lot of the time, Amazon'z retail price is inflated over the going rate and their sale price is near actual retail.
I've probably saved a couple hundred dollars on some of my larger purchases doing that.
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I should say, sometimes, not a lot of times.
Re: I believe it (Score:2)
It happens but there is also a lot of other things like customer service that makes it worth it. Especially for business it's hard to justify a purchase of $300 that subsequently ends up having a problem than paying $350 on Amazon and you can just ship it back. In some cases Amazon will even send you the entire purchase and not even ask for a return. I had a problem with a part of the Nintendo DS kit (gift for someone), they sent me a brand new kit including a new DS without needing the old one back. So I h
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MSRP (Score:2)
Isn't it just generally accepted that these "original" reference prices are just MSRPs and to be ignored entirely? I mean, yeah, the practise is dishonest and should be abandoned, but it is no different from what every other business has done since...forever.
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But when you stick a "Compare At" price on something that is completely fictional you cross the fuzzy line entirely. You can't tell me I "saved" $5 if there was never a sticker for $5 more on the widget. We've mostly been lulled into being scammed and lied to constantly, so I welcome a modicum of push back.
It happens everywhere (Score:2)
Just plain wrong prices on Amazon (Score:2)
Regularly I search on a specific item, see a price, click and no buying option matches that price. Seems scammy to me.
Similarly I regularly get a picture for the version/option/color I searched for, but the price shown is for a different version/option/color once you click. Wastes my time, and is also scammy.
My broader old gripe is searching for a very specific item (say a GTX 1070 card) and getting lots of "related" crap (AMD cards, GTX 1060 cards) that make it hard to actually compare. You have to reso
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Example: I search on "camalot #2", only option that matches the cheapest end of the $52-92.50 "prime" price for "Camalot C4 2nds" is an outside seller (non-prime) who charges a hefty bit for shipping. No way to get the bottom final price shown with a "prime" logo next to it.
Scammy.
Jewelry (Score:1)
Is free shipping free? (Score:2)
While there are occasional Prime sales with free shipping that are real, I've noticed that the price on many Prime sales that include "free" shipping were equal to the price of other vendors on Amazon, plus shipping. Why pay $12/mo for Prime unless you want to stream their movies?