I don’t have to tell you that Amazon is crazy convenient. Forgot to get a bunch of random stuff at the store? Order anything from lip balm to groceries and find it on your doorstep within a couple of days.
There are tons of options for basically any category you can think of, whether it’s TVs or mattress covers, and prices are usually competitive.
Golden age of e-commerce
It’s also a great place to scroll through reviews for larger purchases, or products you aren’t familiar with.
If you’re lucky, you’ll find that golden reviewer who claims to have read every. single. review. and lists out all the important pros and cons for you.
You’ll feel sad for them and incredibly relieved that it wasn’t you all at the same time.
Less of a deal than you think
Amazon is understandably doing pretty well for itself, but a new report commissioned by Consumer Watchdog claims that the e-commerce powerhouse has been posting misleading discounts for about 40 percent of its merchandise.
That means a deal is not a deal is not a deal.
List price lies
The report focuses on falsification of the “list price,” which Amazon defines as “the suggested retail price of a product as provided by a manufacturer, supplier, or seller.”
Consumer Watchdog claims that for two out of every five items, the list price far exceeds any reasonable estimate of the market price for that item.
Take this handy dandy Pneumatic brand drill, which currently sells for $182.99 on Amazon.
The list price, according to Amazon, is $305 – 40 percent off is a great deal, right?
Welllll the same drill sells at Jet.com for $182.99, and Walmart charges $189.99. Amazon looks a little less impressive now, huh?
This example was featured in the Consumer Watchdog report, which was released on a Monday.
Notably, as of that Tuesday, this drill no longer features a list price.
Anything you’d like to tell us, Amazon? Guilty conscience keeping you up at night, compulsively deleting list prices?
List price mark up
Amazon doesn’t make public its list price methods, but neither the average market prices, mean market prices, or median market prices jibed with all of Amazon’s claims.
The report found that 71% of the products scrutinized in the study featured list prices higher than those used by competitors.
In fact, Amazon’s list price was an average of $18.88 more expensive than the market mean.
And median (middle) list prices weren’t any better – 74 percent of the products covered by the report cited list prices higher than the median competitor prices, by an average of $22.
Compared with the most common competitor prices, a full half of Amazon’s list prices were higher.
“In other words, the reference prices were an entirely bogus notional price that created the false impression that customers were getting a deal when they were not,” said Consumer Watchdog.
This practice is misleading, for sure, and dishonest discounts are something every shopper should be wary of.
If the claims are justified, it’s a bad sign for Amazon’s integrity as a company.
Does this feature matter though?
But honestly, I never pay attention to how much “off” something is.
I and the fellow millennials I know who use Amazon regularly do our research, especially for a larger purchase like a fancy drill or a laptop.
We know what it retails for elsewhere. We only care what Amazon’s actual charging price is, not how much it originally cost.
Amazon released a statement in regards to the Consumerist report.
In that statement they said, “The Consumer Watchdog report is misleading. Manufacturers, vendors and sellers provide list prices, but our customers care about how the price they are paying compares to other retailers. We validate list prices against actual prices recently found across Amazon and other retailers, and we eliminate List Price when we believe it isn’t relevant to our customers. Using recent price history of the product on Amazon we’ve also introduced a ‘Was’ price to provide customers with an alternative reference price when we don’t display List Price.”
No harm, no foul?
That doesn’t mean Amazon’s off the hook, by any means.
But it does mean that there might not be too much of an uproar. Especially since shoppers are, sadly, pretty used to distorted discounts in all kinds of brick and mortar stores. Regardless, Amazon has largely set the tone for e-commerce, and they should be better than this.