Amazon Innovations

Is Amazon Ready To Up The Ante On Dynamic Pricing?

Amazon Drops Price Adjustment Refunds

Imitation might be the sincerest form of flattery, but in retail, sometimes, it’s the only way to survive. However, when a company like Amazon holds the reins on so many factors across the landscape, what it does, more often than not, becomes the modus operandi of any merchant trying to strike it big.

But Amazon’s latest announcements might be a bridge too far for even the most intrepid retailers. It might even take Amazon down a path that proves bumpy, even for it.

TechCrunch reported on Tuesday (May 24) that Amazon has quietly stopped a standing policy that saw refunds handed out to shoppers who purchased items that dropped in price within a several-day window. Previously, Amazon had operated the forgiving policy for all items both shipped and sold by its own operations, but according to a spokesperson who contacted TechCrunch via email, this new policy — apparently, retroactive to May 7 — means that “with the exception of TVs, doesn’t offer post-purchase adjustments.”

At first glance, it seems like a move so bold that only Amazon could make it. In the years since Amazon’s thousands of daily price adjustments have become as close to a norm as there is in online retail, there has been a veritable cottage industry of apps and services that not only track but automatically process refunds for price adjustments through Amazon, but this low-key policy change throws all that into jeopardy. Though it might be a moot point, Amazon is contending that this has been its policy all along and that the thousands of price-match refunds it has processed were nothing more than repeated consumer-friendly “exceptions.”

However, Recode was given an altogether different reason for the change: Third-party refund services, like Paribus and Earny, which monitor inboxes for Amazon receipts and automatically apply for refunds with the proper account credentials, may be compromising Amazon account security.

“[W]e take customer security very seriously and want to remind them not to share their Amazon account credentials with anyone,” Amazon spokeswoman Julie Law said.

The astute reader should see that contradictions are starting to emerge here. Amazon’s complaint over the security of customers’ accounts may very well be valid, but Paribus has been up and running for more than a year. Moreover, eliminating price-matching refunds as a way of stymieing the alleged threats from these third parties seems like a drastic — and decidedly anti-consumer — way of going about things.

Could Amazon have ulterior motives for scrapping refunds from price adjustments? It’s certainly possible and maybe even a little bit probable when you think of just how ubiquitous the marketplace has become. As the company keeps adding more and more services and amenities to its Prime program, not buying into that becomes downright “irresponsible.” As Amazon keeps growing its Prime subscriber list, it can rely on those shoppers to spend more on the site to justify their annual membership fees. In the grand scheme of things, getting a few cents back on this or that purchase when Amazon conducts on its thousands of daily dynamic pricing adjustments might not be the prize that most shoppers are focused on winning.

So if “part of what Amazon counts on is a lack of comparison shopping,” an official revamp to its refund policy might open the door for a more aggressive dynamic pricing strategy than previously seen on the marketplace. After all, if Amazon knows its shoppers aren’t going to go anywhere else, there’s relatively little harm in throwing away a safety net that doesn’t constitute one of the core draws keeping consumers engaged.

And without that safety net, who knows how creative (re: aggressive) Amazon might get with dynamic pricing when all is said and done?


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