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The Almighty Buck

Amazon Refunding The Overcharge Experiment 175

MDMurphy writes "Got this in the email just now. Despite reports I'd read that you had to write Amazon and ask for a refund if you saw they charged others a lower price, it seems they are letting their customers know proactively: Greetings from Amazon.com. Thank you for your recent purchase from our DVD store. As you may be aware, we occasionally test various aspects of our web site--design, layout, and other features--for brief periods to determine how they resonate with customers. Recently, we tested the discounts we offered on selected DVDs, so that different discounts for certain titles appeared to individual customers chosen at random. Because you placed an order for the DVD "The Big Blue - Director's Cut" during this period, we wanted to let you know that we will be refunding the difference between the price you paid and the lowest test price that we offered on that DVD during the test period, in your case, $1.49. We also wanted you to know that if we conduct any price tests in the future, all customers who order items affected by these tests will automatically be refunded any price difference at the conclusion of the test, thereby ensuring that they will pay the lowest available price. We value your business and appreciate the trust you have placed in us by being a customer. Thank you for shopping at Amazon.com." You can see another news report about the havoc the "experiment" has played on things.
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Amazon Refunding The Overcharge Experiment

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  • Reminds me of the beard salesman in Monty Python's "Life of Brian"...

    In a way, this is sort of a backhanded way to "haggle" the price. By giving different prices to different people who don't know each other, it's sorta like a "single-blind" test to zero-in on the exact price where demand/sales/etc all balance out to maximize profits.

    Trouble is, now that the cat's out of the bag, we'll soon see an "Amazon-Price-Watch" website appear, by which the "people who don't know each other" can trade info.

    Now, if this could be done in secret (ie: Amazon doesn't know about it) then those "people" could basically pull a sorta "social-engineering" hack to drive Amazon's prices down.

    What would it take to do something like that?

    --jrd

  • What do you expect? They got caught with their pants down and now they need to save face. Can any of you seriously believe that if this hadn't been so widely publicized that they would have ever even considered refunding any money? Or for that matter, how many of these "experiments" have they done in the past without anyone ever noticing?
  • Why is it Amazon can pull something like this and just walk away from it? Saying "whoops" were sorry... "tee hee our mistake"???

    Because it is not illegal to charge the highest possible price a consumer will pay before choosing a substitute. In fact, economic theory encourages it to push the economy towards general equilibrium. Simply put, there are people who feel they have no power over their purchase decisions (it's fate), then there are those who feel that it is actually THEIR decision. These are the people who benefit from the others because they get the lower prices which are paid for by those paying above the mean price.
    Your resident economist
  • Zappa had a knack for saying things that sounded profound but weren't. Just like his music.
  • This was just a test of the Amazon Corporate Money-Sucker - Patent Pending.

    Actually, I don't think what they did was bad at all. But I would like to know what their official and full policy is. (Can anyone find it on amazon? I couldn't.) So now will everyone go back to paying their Amazon decided price for the Run Lola Run DVD, or will everyone pay the same? Isn't there an obligation to inform users when they are part of a test - could this be considered working for Amazon, albeit unknowingly?

  • Because you placed an order for the DVD "The Big Blue - Director's Cut" during this period, we wanted to let you know that we will be refunding the difference between the price you paid and the lowest test price that we offered on that DVD during the test period, in your case, $1.49.

    This doesn't sound like Amazon is going back on the experiment. It's just saying that consumers who buy items during the experiment will get refunded.

    --

  • First of all

    I do not and will not shop at Amazon, but that is just a personal bias.
    Granted I do believe that this is just another prime example on how your personal privacy is being lost.
    Not only, is it a loss of privacy but the "marketing" information is now being used to discriminate against you.
    I think that Amazon is doing this refund in retrospect of bad press for sites like SlashDot.

    Second:

    It's not just a simple case of being lazy. Granted Amazon doesn't give you a slogan stating the best price, but last I checked price descimination was illegal. You won't walk into a store and find out that the person in front of you got the computer for $1000 while you're being charged $2000.00

    "Sometimes we all need to stop and think."
  • No, we're talking about different people getting charged different prices for the same thing, and how the poster is offended by the very idea. The poster has obviously not had much experience with the real world.


    ...phil
  • that the experiment and the glitch are not related? Think about this, the original story states (paraphrased) "the difference between the price you paid and the lowest price offered" now.. if there were a "glitch" in the experiment that offered these prices to everyone on a couple of days, but normal prices on the other days of their experiment then, by their own statement, they would be refunding the difference between those 75% off prices and the rest of the orders placed on those items. Do you really think amazon is going to want to bite that bullet? I think they're trying to cover whats left of their a$$ as they watch their customer base dwindle like a pile of sand in a wind storm.

    just my $.02 on that... on a seperate note... if you read the cnet article here [cnet.com] amazon should NOT get away with this! If you walk into a store, see something priced for $20, take it to the register, it rings up for $20 and you buy it with your credit card. When the store realizes they had the wrong price for that item they, legaly cannot force you to pay what they feel was the correct price. Why should an online retailer be governed by different laws regarding prices, sales, bait and switch etc then a brick and mortar retailer?


    BillyZ
  • Because people have working assumptions that vendors will sell according to the market price? That it shows a severe lack of respect toward its customers that Amazon would do this? That people, were in fact, "ripped off"?

    If this were normal behavior for companies, and people could assume that they could be selected to receive a higher than normal price, either randomly or according to demographic profiling, then, yea, they have little to complain about.

    This is unlike your airline example, where most everyone understands that the closer you get to a flight, the more the tickets will be. Obviously demand is going to be higher for those buying their tickets at the last minute.

    But that isn't how things work for bookstores. There is a fairly stable market price for books (and DVDs, and music). Books don't suddenly go up and down in value (unless Oprah starts harping about them), and certainly not in the seconds between one purchase and the next. No one expects that their individual price could be randomly because Amazon is not a place where you can haggle.

    They did something shifty and sleazy and now they're getting spanked for it by the market (you know, us), and rightly so. Just because you want to bend over when corporations pull this crap doesn't mean the rest of us should shut up about it. Thank us, we're the ones keeping the market fair, and ensuring that *you* don't have to look at dozen websites to price things, and log out and relogin again to try to get the lowest random price.
  • This was just a test of the Amazon Corporate Money-Sucker - Patent Pending.

    Actually, I don't think what they did was bad at all. But I would like to know what their official and full policy is. (Can anyone find it on amazon? I couldn't.) So now will everyone go back to paying their Amazon decided price for the Run Lola Run DVD, or will everyone pay the same? Isn't there an obligation to inform users when they are part of a test - could this be considered working for Amazon, albeit unknowingly?

  • by drfireman ( 101623 ) <dan&kimberg,com> on Wednesday September 13, 2000 @05:51AM (#783004) Homepage
    Zappa's Law (as relayed by StoryMan, who admits he may have gotten it wrong) may be cute, but it will get you into some serious trouble if you actually believe it in some consequential context. Let me give two pertinent examples.

    It's true that with respect to dying on a given flight, there are two major outcomes: dying and not. However, those two outcomes don't come in even proportions -- they aren't 50-50. If people from my country always fly on 50-50 Air, and people from your country fly on 99.99999-.00001 Air (both pretty shoddy organizations), then after a short period of time my country will be depopulated, while yours will thriving (but perhaps a bit nervous).

    Now let's look at two online booksellers. 50-50 books figures either a book sells or it doesn't. PriceSetter Books is interested in the factors that contribute to the probability of a sale. PriceSetter figures out it can double it's sales of "Lucky Numbers" by changing the price from $13 to $12.95, and at the same time sell the same number of copies of "Worthless at Any Price" at $15 as it did at $12. 50-50 figures no matter what the price is, there are still exactly two outcomes, and just charges whatever they think is a good price. In both cases, a given consumer either buys the book or doesn't. But PriceSetter will earn more money, because they know that when you're talking about a million customers, there is a huge difference between 3% and 3.1%. And neither is all that close to 50-50.

    Nobody really expects that booksellers won't try to maximize their profits by setting prices appropriately, whether profit is maximized in the short term, long term, or whatever (selling a book at a loss could maximize profits in some cases, I'm sure). But obviously in this case, people aren't happy with how Amazon went about it. I'm not so happy about it either, for many of the reasons listed in this thread.

    Anyway, relevant to your message, I think we're stuck with the ad men and marketing slimeballs, because even if they're completely incompetent and come up with the wrong answers (price testing increases profits by .02%, but puts your company out of business when it gets posted on slashdot), it's nonetheless true that price shenanigans, heavy graphics, and all the stuff you and i may hate, have some connection with profits, and it's going to be hard to convince Amazon to stop trying to figure out what that connection is.
  • If you go to buy a car the sales rep (if he's worth any salt) has ALREADY profiled you. The way you talk, the way you dress, how you aproach him.. etc. He gets a VERY GOOD idea of how much you're willing to pay for the car.

    Amazon is doing the SAME THING. Except instead of having a a person evaluate you it has a an algorythm based on your past habbits. What's wrong with that?

    So you're a convinience shopper! You don't like to take the time to evaluate things.. FINE BY ME! U deserve to be charged more.. why? 'Cause you pay for the convinience. Get used to it.

    It just seems like every one want's something for free these days.. well reality check.. NOTHING is FREE!

    Ex-Nt-User
  • I agree! I wish /.ers would realize what it means to run a business.

    oh well.


    ---
  • ...it won't be a test. It will simply be a new "pricing policy". Do take note that they did not publish the goals of the test, nor the results.

    The end result is the same. If they raise their prices(for me) enough, I will go to a competitior. If their competitor does the same, I'll go back to the local store and pay cash.

    Problem solved.
  • I take it as Amazon is fucking with me.

    So guess what. I don't like being fucked with.

    Haven't bought airline tickets recently, have you?

    In case you don't know, airlines do this all the time, and we're not talking about variations in the $1-2 range, more like $200-$400. It's called 'yield management' and prices can vary by the minute.

    Given the attitude you've expressed here, I presume you don't patronize airlines either, huh?

    If, on the other hand, you DO patronize airlines, then what does that say about your attitude?


    ...phil

  • t's not just a simple case of being lazy. Granted Amazon doesn't give you a slogan stating the best price, but last I checked price descimination was illegal. You won't walk into a store and find out that the person in front of you got the computer for $1000 while you're being charged $2000.00

    Racial or gender discrimination isn't legal, but Amazon doesn't have that information anyway. But no company has any obligation to charge customers identical prices for the same item. If the guy in front of you has a "$1000 off your next computer" coupon, you'll be charged a different price. Kids or the elderly can get discounts for all sorts of things, thus being charged a different price. If a company has a sale, the people buying before and during the sale get charged different prices. If I buy a car, I might haggle a different price than someone else for the same model/features.

    It's called capitalism.

  • I remember watching the discount of books changed frequently too. Free for All [amazon.com], for instance, bounced all over the place. Now they don't offer any discount at all. I wonder why? FatBrain [fatbrain.com] was offering 40% off the last time I looked.

    I think they've been experimenting in many more places. I wonder if they're going to come clean there too.

  • If they will always refund the differences of these "tests", then why do them? They must still think that eventually they will arrive at a point where they will be able to implement it for good.

    But I think that someone will always be watching and will always notice now. About the only way I think they'll be able to get away with it is to have some kind of "frequent buyer" club like my local grocery store. Basically they raise the prices of everything and then give you "discounts" on most stuff for being a member. It's a scam but they make it look like you're getting a deal. Amazon might do it that way but I don't think they'll ever get away with doing it in secret again.
  • by (trb001) ( 224998 ) on Wednesday September 13, 2000 @04:28AM (#783012) Homepage
    Am I the only person that doesn't see a real problem with what Amazon did? Okay, yes, giving something to someone for a lower price than someone else for no good reason is bad, slightly unethical, but look at it this way...

    When I shop for something online, I spend at least an hour looking for the best price. I check at least 5 sites, a couple of auction sites, not to mention that big blue covered thing called the Real World, and when I find the best price, I take it. Assuming Amazon gives the lowest price, who cares if someone else got an item for less than you? Welcome to Consumerism 101, it happens. Somebody mentioned airline tickets the other day, perfect example. You could have paid half what the person sitting next to you paid, you could have also paid double. Shop around first!

    "If they were doing research, that's something that costs money," he said. "They can't expect to do research for free all the time."

    It's their system, if you don't like it, don't use it. As much as I disapprove of recent Amazon actions, it's still their right to tweak their own system.

    --trb

  • by NetJunkie ( 56134 ) <[jason.nash] [at] [gmail.com]> on Wednesday September 13, 2000 @04:29AM (#783013)
    It's on Slashdot isn't it? It HAS to be a conspiracy!
  • by LordNimon ( 85072 ) on Wednesday September 13, 2000 @04:29AM (#783014)
    Amazon still profits from this venture because they are keeping the interest they made on the surcharge. If they invest at 6%, then keeping that extra $1.49 for two months means they made 1.49 cents. That doesn't sound like much, but multiple it by the tens of thousands of customers, and we're talking thousands of dollars.

    Not only that, but will they be applying a refund to the credit card, or just giving you store credit? If the latter, then they make even more money on interest, and they don't have to pay any fines to the credit card company (if you make too many refunds, most credit card companies will charge you a fine).
    --

  • by Kaa ( 21510 )
    Jeff Bezos is a smart guy and Amazon has a good PR department. 'nuff said.

    Kaa
  • ...if this was actually an 'experiment', or if they thought they could get away with it? With all the bad press they recieved over this, I would assume the later.

    Do you know what the purpose of a business is? Let me tell you: to maximize profits. If you can pay more, there is no reason why they shouldn't charge more. Ever buy a car? Some people pay more than others for the same vehicle. Yet no one on Slashdot gets upset.

    Amazon's business practices are their own problem. If you don't like it, how difficult is it to buy your "The Professional: Director's Cut" DVD elsewhere? It's a free market.

    -- Floyd
  • What are you rambling about? They didn't switch prices on people. People were shown the price they paid. That's it. They didn't see one price and get charged another.
  • ...which (IIRC) at least five of the big six recording companies were caught doing, at least Amazon is trying to compete and be profitable within the bounds of the law, such as it is. Maybe they were trying to drive the prices up, maybe down, but in any case, at least free enterprise competition (and the oft-maligned free press) did their jobs and forced the correction.

    Of course, like many others here, I'd be willing to assist Amazon in their drive toward profitability. By my last count, they've lost at least $300 in sales which went to a competitor (Barnes and Noble, if you must know) which would have been theirs without the boycott currently in effect, so multiply that by the number of folks not willing to buy until the time Amazon drops "one-click" patent nonsense.

  • But I know that if an online business came out and said "one out of every hundred purchasers will randomly receive a five dollar credit towards their next purchase," the gubment would go nuts.

    They most certainly would not. All sorts of promotions and contests work this way. Take for example the contest gamepieces you get at fast food restaurants -- like McDonald's Monopoly game or whatever. You get your card when you buy a burger and scratch off to see what you've won. Maybe you've got a 1 in 10 chance of getting a free fries during your next visit.

    What the government would go nuts over would be if the pricing or discounting was done in a NON-random manner. (e.g. all white people get free fries while everyone else pays.)

    As long as its non-discriminatory, differential pricing is something that's been happening in the off-line world for years. Just because it's on-line doesn't mean it's new!

  • It's not differential pricing I'm talking about; it's gambling. Making a giveaway contest (e.g. free Big Macs) not be gambling is why you always see the words "no purchase necessary" somewhere in the rules along with instructions for entering the contest without making a purchase (e.g. send a SASE to "Free Big Mac Contest c/o blah blah blah"). You also see "void where prohibited", but I've never lived where it would be prohibited so I don't know where or why it is prohibited.

    That fewer than one percent of contestants ever mail in a request for a free game piece is testimony to the promotional value of the contest, but technically it's still not gambling.

    --

  • Why? Did Amazon charge your credit card more than they said they would?


    ...phil
  • "Is it unfair that I have to pay more for gas in the city than out in the countryside?"

    There are people who will blindly answer "yes" without any idea what's involved in selling gas. At the Oregon State Fair a few years back, my mother helped run a booth, and became aware that there were rules determining what price may be charged for soda. Apparently if you wanted to sell soda you had to sell it at the same price as everyone else who sold soda, no more, no less. This being a semi-private event which vendors participate in voluntarily, I can't complain too loudly, but I find the notion of comittee price fixing disgusting. However, it exists, and probably because someone said, "it's not fair that I should have to walk 100 yards to find a good price on Mountain Dew". Fair? Who cares? Do you want the drink or not? Do you like the price or not?

    In any case, there are a lot of people out there who DO think they are the center of the universe and everything should be figured out for them because it's only "fair". Don't ask them questions to which they will be happy to give you the wrong answer. :)
  • It's not a matter of whether Amazon has done something wrong. Everyone keeps arguing about price discrimination and whether it's similar to coupons or how airline tickets have different prices and car prices vary for different customers, etc.

    Right or wrong isn't the point. The point is they pissed off customers - which isn't nearly so much a question of ethics as it is a question of intelligence.

    Whether this move was "wrong" or not is irrelevant - that it was incredibly stupid is relevant.

  • You will never go to your local food store and aruge for a better price.

    Bzzt - try again. I am an American, and I love to haggle. If I go into a grocery store, and see a product at one price that I know that I can get elsewhere for less, I will let the manager know, and let him know that I am fully prepared to walk out of the store, not buy ANYTHING, and spend my money at a competitor. Sometimes it works, sometimes it doesn't.

    What really gripes me is the way they screw with you on "bulk" pricing. A store may charge $3.99/lb for chicken breast, for a four breast package. But the "family" pack of 20 breasts may go for $2.99/lb. WTF? The family size took more effort to prepare than the smaller pack (more pieces to put in the pack, generally by hand - but if by machine, then it shouldn't matter). On top of this, both packs are store brand packs, packed at the same store - from the same bulk purchase by the store. Thus, the difference in the pack isn't the amount of chicken in the pack, nor the amount of effort to prepare the pack, nor where the chicken came from. So why is it?

    It is simply by what they define as "family". Apparently, they define a family as 2 adults, 2 kids - with a big freezer to stick all that meat in. They have never heard of a 2 person family with a small freezer who like to prepare meals the "european" style (ie, going to the store several times a week - or daily - rather than "stocking" up).

    When I see this practice, I haggle. Hardly ever win though (gotta love the people's looks around me - they think I'm nuts - I love it!).

    Regarding car buying: Many people like to haggle when buying a car - what people don't like is the shitty way salesmen treat them during the process, such as leading them away from the car they want, trying to get them in a higher priced car, or doing bait-and-switch style tactics. I am not saying everyone loves to haggle for a car, but quite a few people do.

    Lastly - regarding yard sales in America - yes, people do still haggle at them - but I have had a few yard sales in the last couple of years, and have been to many more. What I have been seeing is people NOT haggling at yard sales, which was strange (like every item had FIRM marked on it, or something)...

    I support the EFF [eff.org] - do you?
  • For example a bar (in Illinois I know laws differ) can not have a happy "hour" and then raise there prices after everyone is in and drinking.

    Totally different. The effort here is to reduce drunk driving by not selling booze cheap.


    ...phil

  • My reply from my e-mail to Amazon:

    Thank you for writing to us at Amazon.com.

    >From time to time, we test and re-evaluate various aspects of our web
    site to determine which characteristics drive customer purchases and
    satisfaction. We've learned that certain aspects of our site resonate
    with customers in different ways, and we are continually fine-tuning
    our presentation--site design, layout, price, customer reviews--to
    provide our customers with the greatest value, selection, and
    information for their online purchasing decisions.

    These tests are conducted for a brief period during which certain
    sections of our web site will appear differently to randomly selected
    Amazon.com customers. Price is one aspect we may test, and
    accordingly, that means that some customers may pay a different price
    for select items. However, please bear in mind that the discounts we
    offer on items in our catalog do vary even when we are not testing our
    site.

    I hope that I have been able to address your concerns. We value your
    business and look forward to serving you again in the near future.

    Best regards,

    Kim H.
    Amazon.com
    Earth's Biggest Selection
  • Don't offline businesses already do just that? Promotions like "nth shopper gets their groceries free" or the Visa/Mastercard/Discover (or was it AmEx?) promotions around December that they'll pay your bill.

    In a free market buyers and sellers agree on a price. If buyer[0] was able to agree to a price that was lower than buyer[1], then good for buyer[0], not "shame on the seller".
  • My thanks, though I've coped with worse that this littl pissant.
  • In Economics, the highest price you are willing to pay is referred to as your reservation price. This may be higher than the market-clearing price which you actually pay. The difference between the two is called consumer surplus. Mass merchants have historically found it less costly to just assign what they think will be the market clearing price rather than try to haggle with each customer to try to close in on his/her reservation price. I mean, when you go down a supermarket aisle, do you haggle over the price of every item?

    Enter the web. Amazon has your shopping history and other information that helps them guess your real reservation price. You evaluate their product several times, checking prices at other sites, trying to make up your mind. Each time you look, Amazon presents you with a different price, effectively negotiating to try to get you to buy closer to your reservation price than the market clearing price. And it's done by a machine, not a costly sales rep. I don't blame them for trying it.

    --

  • Now if they would just drop that patent, I would buy things from them again...
  • When I shop for something online, I spend at least an hour looking for the best price.

    I have to wonder why. If you're looking for a new CD, let's say Amazon has it for $15.99. If you spend an hour looking around and find it for $14.49, are you really saving money? Sure, you'll save that $1.50, but what about the hour of your time that it took you to save that $1.50? Unless you work in one of Kathie Lee's sweat shops, your time is probably more valuable to you than that.

    Of course perhaps my example is bad because the majority of /.'ers would probably just steal the MP3s from the album anyway (and end up with a horrible-sounding copy, to boot).

    To answer your question, no, you are not the only one who feels that Amazon isn't wrong to adjust their prices on a case-by-case basis. This happens everywhere. It's how the economy works. Everybody around here complains when the government starts setting regulations - why not allow Amazon to set their own prices and let the market worry about it?
  • That will learn you! Wont ever actually read before posting again will you!?!?!?!

    PS. Want sex?

  • Send ten people to a car dealership (not saturn) and they'll end up paying ten different prices for the same car.

    If Amazon is going to charge me a higher price because I don't shop there enough or whatever they're playing a dangerous game because chances are I'll find a lower price somewhere else.

    But now that Amazon has been 'busted', they need to do something. And that is apologize, and hope that they don't lose too many customers over this. Even though there's nothing wrong with 'this' in the first place.

    It's all bottom line and public perception. Next time they'll take it to a focus group first.
  • Mod this up. He's right. People paid a price that was agreed upon and now they are mad that someone else got it cheaper. Next time shop around.
  • Thanks, I needed a good laugh...
  • Yeah, then sell your buying habits to the MPAA so Jack Valenti can send you smiling ads abouthow your VCR connects you to the Boston Strangler.

  • The way I see it (as a layperson with a teeny bit of legal education), what they did in the DVD case is a breach of contract. You agreed to buy something at a given price. They want to welch on the deal.

    I say screw 'em. What would their reaction be if you said, "Oh, oops, that was a glitch in my browser, I only wanted to pay $30 for that book, not $50! My bad."


    -bluebomber

  • Here is a link to a prescient column by Jakob Nielsen: Profit Maximization vs. User Loyalty [useit.com]

    The entire thing is worth reading, but here is a good quote: "Even though standard economic theory says that you should employ [differential pricing] strategies, I warn against them due to their impact on user loyalty."
    -----
    D. Fischer
  • Well, I never said that I wasn't an abnormality in the "system", but the way you phrased the question may it seem like you were targeting individuals:

    You will never go to your local food store and aruge for a better price.

    If you were meaning to target the group as a whole, then a better phrasing would have been:

    The average American would never go to the local food store and aruge for a better price.

    I can't say that I have been to a country where one is expected to barter (closest I can admit to would be a Mexican border town - usually you can barter there, it isn't unheard of, but vendors get ansy when they see an American bartering), but I would imagine I would enjoy it. I tend to only barter if I feel the price is unfair, or if I would like to get a lower price (if I feel the product is worth what it is marked at, then I will pay what it is marked at, no questions asked - it doesn't matter if it is a flea market, garage sale, or car dealership - fair is fair).

    You are right in saying that "when you shop in a US store, you aren't expected to barter" - but just because you are expected to do something, doesn't mean you have to, or should...

    I support the EFF [eff.org] - do you?
  • by Sarkazmo ( 231968 ) on Wednesday September 13, 2000 @06:29AM (#783047) Homepage
    You are obviously not a math guy. Probability is important: it is not as dangerous to fly on a commercial airplane, or say, bungee-jump out of a baloon with the bungee on fire. The probability is not 50-50 on both incidents. But, by all means, prove me wrong. Back to Amazon: wake the hell up! retailers have coupons, promos, catalogs, a bazillion things customized to give different prices to different people so they can sell as much as they can at the highest margin that they can get. It's not a swindle by some "Microsoft drones", its called, you guessed it: Capitalism. Live with it or get out of the way. And what the fuck is up with the "Microsoft drones" quote? does any rip on Microsoft get a 5, Insightful on /.? What on earth does this thread have to do with MS? I mean Amazon uses Perl, AFAIK, not ASP... Do you feel the need to attack MS to look /.-cool? is that the quality of post we are moderating up these days? sheesh...
  • How come they don't think: okay, consumers are savvy...

    'Cause they're not.

  • by bfree ( 113420 ) on Wednesday September 13, 2000 @06:43AM (#783055)

    Yup, the point I was trying to make was that what they are doing is not any different to the car salesman....... none of us like to see people taken for a free ride.

    We cannot object to the concept on principle, but this is a topic for Slashdot discussion because we should be trying to see if there are any ways they could be using which are not or should not be legal. If they are only gathering your info from their site I don't believe anyone can have a problem with that. If they are matching this up with data from other sources (e.g. doubleclick as mentioned) to track you all over the place because you are one of their customers that is equivalent to hiring a PI to follow you to see how you drive cars and which of your friends cars you look at and how much money you have and ..... you get the idea it is illegal.

    Just because it is digital and/or online should not change the legailty of an issue, the difficulty is in coming up with suitable paradigms for these new online techniques in the real world whose law should apply.

    I don't want anything for free except my Freedom, I just feel that whether legal or not we should all draw attention to the immoral business acts (such as patenting the one-click shopping IMHO) of any company so that we can vote with our wallets, hits and feet rather than be dragged along in the blind.

    I don't know if Amazon are doing anything immoral here, but I think it more likely for someone here to know (or figure out) what they are doing than in any other forum.

  • by Jish ( 80046 ) on Wednesday September 13, 2000 @04:36AM (#783057)
    In the recent Slashback [slashdot.org] Amazon.com said something totally different:

    jeko writes "Amazon.com just sent me an email claiming that their different prices for different customers are merely a mistake."

    He cites email from a customer rep at Amazon:

    "Finally, at any given time, despite our best efforts, a small number of the more than 4.7 million items on our site may be mispriced. Kristine Jorgensen, Amazon.com"

    So which was it... a mistake or an experiment?

    Josh

  • What about this [slashdot.org] thingy about Amazon prices just being a "mistake"? I guess that was an early attempt at damage control, but few people bought it.

    I hope this practice doesn't become the latest rage on the web. Personally, I think that Amazon should patent it and not let anyone else use it!

  • by joshv ( 13017 ) on Wednesday September 13, 2000 @04:39AM (#783059)
    My god, if retailers kept abusing their power to price things differently for different individuals, congress might have to enact a 'fair pricing' law. Heaven forfend.

    What the hell is with people that think pricing should be 'fair'? Who the hell ever guaranteed that everyone should pay the same price for the same goods? Is that in the consitution somewhere?

    Is it unfair that I have to pay more for gas in the city than out in the countryside? Is it unfair that I have to pay more for a plane ticket than the guy who reserved weeks in advance?

    Amazon displayed the purchase price and every single one of the people that are now getting a 'refund', agreed to pay the price Amazon quoted. I don't get it, refund of what? If you paid the price both you and the seller agreed upon how can there be a refund?

    -josh
  • For example a bar (in Illinois I know laws differ) can not have a happy "hour" and then raise there prices after everyone is in and drinking. Isn't it really the same thing.

    No, they're different -- witha happy hour, everyone wins. I's more of a problem with the drinking laws in Illinois than with anything else. Can you explain what's wrong with a happy hour? It's a business model that benefits everyone. The customer gets cheaper drinks for a limited time, and the establishment gets to sell more drinks (with a reduced profit margin, but gambling that the increased sales make up for that loss). Who loses here?

  • Trouble is, now that the cat's out of the bag, we'll soon see an "Amazon-Price-Watch" website appear, by which the "people who don't know each other" can trade info. Now, if this could be done in secret (ie: Amazon doesn't know about it) then those "people" could basically pull a sorta "social-engineering" hack to drive Amazon's prices down. What would it take to do something like that?

    If you wrote an application the combined the functionality of IRC and gnutella, with a little extra, you could pull this off. The difficulty would be in collecting a sufficiently large amount of data. Of course, in order to collect enough data, it would be impossible to do this "in secret", and Amazon would either end the program (not a bad thing...) or try something else (probably a lawsuit against the authors of the software...).

    -bluebomber

  • just an FYI (not that I'm really serious here, but...)

    small warning for posting fake PR [nytimes.com]

  • Prices this time were dropped, I think, based on marketing information, probably not at random as they say. What happens if next time they are raised. Does that still count as "capitalism"? All Amazon has to do, if you complain because you found out, is that "oh, sorry, there must have been a glitch..." and they're sitting happy becuase there were thousands of customers who didn't catch the "glitch".

    There is no such thing as "price discrimination". If Amazon thinks a bunch of consumers will pay $22 for Product X but the rest will only pay $20, they're free to try and charge the bunch of consumers $22 for it. There's no "bait and switch" here; everybody is still paying what Amazon charges. But if that bunch of consumers sees that SomeOtherSite.com is charging only $20 for Product X, Amazon will lose those sales. Thus, the price for that bunch will fall back to $20 again.

    It's still capitalism and if you want to make it work, you have to shop around.

  • by Sarkazmo ( 231968 ) on Wednesday September 13, 2000 @06:56AM (#783075) Homepage
    Perhaps *I* am cynical, but why the hell is this thread titled "Amazon Refunding the *Overcharge* Experiment"? Amazon is clearly not trying to rip some people off, they are giving a *discount* to some people who would otherwise not buy from them.

    What the hell is wrong with that? it's called bargaining (as in what happens in a bazaar, you know the thing that's much better than a cathedral?) and it's SOP in 80% of the world.

    Amazon has done some stupid stuff, but they are not by any stretch of the imagination some big evil corporation out to assimilate the world, and I am sick and tired of the anti-Amazon bias of the stories posted here.

    I am also considering buying exclusively from them from now on, just because I know I have a *chance* of being offered a discount. Because I am *that* cheap. I use Napster too.

  • What I can't understand is why they'd even let this get out of hand like it did. I mean, the only thing Amazon really *has* above the competition is a base of really loyal customers. *Why* would they want to alienate them like that? Patent issues aside, I think Amazon has done a damn fine job with their site and all the nice features they've added, making it a real "comforting" and convenient experience. Why would they risk it all with a ploy like this?
  • Look around the site. I'm sure you'll see a disclaimer like you see on catalogs stating that they won't be responsible for typos or pricing mistakes.
  • With two headline-making price glitches, Amazon is looking a bit inept at this point. What's amazing is that they've managed to develop one of the best, most comprehensive, and most innovative online shopping experiences and they can't figure out how to keep their prices straight. It's too bad they're not doing their new car store in-house. ("Check it out, this new Mercedes lists at $50,000 but I got it from Amazon for $8995!")

    But what's even more amazing is their lack of business savvy on this particular issue. Amazon thrives on repeat customers and that requires good customer service. Whatever loss they would have taken by shipping discounted merchandise, the cost of all this bad press will be worse. If you're looking for signs that Amazon's on its way out, incidents like this are even more of a warning than their earnings reports.
  • by interiot ( 50685 ) on Wednesday September 13, 2000 @05:11AM (#783089) Homepage
    Since they said they might do the exact same thing in the future (random prices followed by refunds), it might be that they view the 2-step thing as a legitimate way to find the best spot on the price elasticity curve.

    If that's true, then it doesn't seem to me that they were caught with their shorts down.

    But maybe they planned to have their shorts down as long as possible, planning to pull them up as soon as enough people noticed.
    --

  • Well, to (attempt to be) fair, the CNET article [cnet.com] reports that there was both a test and a glitch. One might well guess that the glitch was a bug in code changes for the test. Also, the article says that the glitches led to lower prices, not higher ones. OTOH, Amazon was apparently demanding that people pay the "correct" higher price rather than the one they had agreed to pay or cancel their order.

    A botch, to be sure. But not necessarily a cover-up.



    --meredith
  • by billcopc ( 196330 ) <vrillco@yahoo.com> on Wednesday September 13, 2000 @05:12AM (#783091) Homepage
    This happens all the time, in all markets. Take for example your favorite fast food chain. Let's make it Taco Bell for the sake of my example. Suppose your neighborhood T.B. sells their tacos at 79 cents each. Go to the movies and go eat some Taco Bell there, you'll pay at least 99 cents each, a 20% increase for the exact same product (although often inferior because they're in such a damned rush).

    Let's take another example : Let's say you buy a shitload of computer gear like I do, and you almost always stick with the same shop for whatever reasons. Let's say you want to buy a GeForce2 with all the fixin's , that retails at maybe 569$ (in case you're about to have a seizure, those are canadian dollars). Well since you're such a loyal customer the shopkeeper might let you have it for 529$ at 40 bucks off since you've probably brought him 20k worth of business in the past 3 months. This is perfectly legal and happens every day.

    So in conclusion, this is another case where everybody bitches when they're on the short end of the straw, without realizing that the situation is often reversed.
  • Dude, my point is this (and believe me, I understand it's captalism at work): if there's a coupon for something -- and I'm able find it -- then, fine, I'll use the coupon.

    I know Buy.com is running a deal for free shipping now for orders over a certain amount. Great! I'll get that Palm V and get free shipping. Great! That makes me happy.

    I know techbargains.com has a pretty decent tally of the latest coupons and bargains. Super! I'll check techbargains, see if there's a coupon I like, and then use it to buy something. In fact, I'll use it to lower the price of an already low item. Great!

    Why is this great? Because it empowers me as a consumer. It empowers me to take 10% off the top of an already low bargain. It empowers to me to know that for certain shops I can get *even more* by going to ebates.com and getting another 2% or whatever off the top.

    And believe me, I'm the first to admit that it requires some effort to get the lowest price -- and oftentimes the sheer effort simply obviates the bargain because my time (and yours, and anyone else's) is generally worth more than the dinky bargains that I can keep skimming off the "list" price if I know how to shop.

    Kinda like those idiotic coffee coupons that Seattle's Best makes you carry around (buy 10 get 1 free). Those things annoy because (a) why can't they just give me a fucking low price instead of making me work for it and earn it by carrying around stupid cards that (b) need to be stamped by bored clerks and their little first grade stampads. But I digress...

    My point here -- and even with the reference to Seattle's Best -- is that as a consumer you should *know how* to get a good price. (You may not now in what specific newspaper a specific coupon exists for a specific discount, but you know that if you searched around and spent a little time, you could page through the Sunday supplements and probably find a coupon for 30 cents off Pledge cleaner and your local supermarket.)

    What Amazon did wasn't "consumer empowerment." They didn't seed coupons around for repeat customers or for loyal customers or for new customers -- they simply did back office tricks to see who'd bite on what.

    And yes, yes, yes -- I understand this is how capitalism works -- at least "consumer capitalism" -- the law of supply and demand -- the idea of fscking with prices to see what's the "target" price or the "trigger" price by the "target demographic". And, yes, this is what I meant by Microsoft drones (even though Amazon isn't an MS shop): everybody is touting "personaliztion" as the panacea for the coming internet consumer economy.

    But the goal wasn't better pricing or (god forbid, I mean: what the fuck are you talking about?) goodwill toward the (eek!) consumer!

    The goal was get data for their personalization database. (Whether it's MS or not -- whatever -- hence the MS crack -- drones gathering data -- blah blah blah)

    "Imagine this: you can log on and WE'LL tell you what we THINK you might like to read! We'll keep track of your newborn's age and TELL you that at 3 months your newborn will probably need item X or item Y and at 4 months [hello! it's us again, we'd just though you'd like to know...] that your newborn needs item Z and [hello! it's us again] we notice that you've bought items from X and Y shops and thought you'd like to know that Z and A and B and C is on sale and [hello! just a quick note] that other people in Centerville USA are really grooving to the new sounds of Y Band or reading the latest Oprah book or that [hello! it's us and we'd thought you'd like to know that] all of your friends and neighbors are reading Harry Potter and that [hello! guess what? it's US!] because they're reading Harry Potter and they're between the ages of 25 and 30 and were born under the sign of Saturn on a Wednesday and are predominantly male post-graduates who attended Yale in the 80's and had friends who went to Michigan who, at one time [hello! we're sending this out to all your friends, too!] participated in a seminar taught by Prof Z who once [hello! Did you know] knew a Black Panther by the name of [books about the 1960's? you bet!] Argentinia P. Cheek who had a child murdered by a police mob [and -- hello! -- did you know Argentinia now sells a cookbook and how-to book for people in the suburbs] that was also at Kent State [books about politics and Vietnam? You bet!] and stood behind a tree while the National Guard murdered the students [hello! it's us. Did you know that other liberals on your block once fought and died for their brothers and sisters and stood against the pigs that hawked the war in Vietnam] and you [hello! we know you! we know! we know who you are, how much you make, and based on our statistics] and you, standing behind that tree, watched it all unfold and didn't do a damn thing but that 30 years later, you still made it into our database of aggregate consumers who wear clothing, speak a language, and live and breath because that heart in your chest is enabling your soul to want our stuff, to buy our products buy our stuff buy buy, yes, yes, buy buy buy our shit."

    I mean, for fuck's sake: enough.

    Personalization is insane. Just give me a low price.

    I walk out the door I'm either dead or alive. I don't need statistics. I don't need the latest MS commerce server or site server or SOAP or XML to coordinate my location with the number of gallons left in my gas tank with my income lost last year to bad corporate decisions by 20 year old whiz-bang CEO's.

    Just give me a good price, take my money quickly, and get the fuck out of my face.

  • I'd say it would have been a better PR exercise if they hadn't gone around sending emails saying "you ordered at this price. we're shipping at this price. if you don't like it, then cancel your order, it'll sit there until you approve/cancel it".

    my boyfriend got one of these, after he got some very nice prices, courtesy of Amazon's little "tests". after that email (though I'm not sure how many people they sent it to -- I know quite a few anyways) I think people are going to be a little pissed.

    of course, if they don't publicise it, it's all for nothing, isn't it?

    Lea
  • "Please be aware that when we do shut down the website, we will sell the user data we've been colleting about you to the highest bidder."
  • by phidipides ( 59938 ) on Wednesday September 13, 2000 @04:51AM (#783102) Homepage
    You know, I bought a car a while back and then found out that some people got better prices than what was marked on the sticker because they took the time to bargain with the car dealer! And at a flea market last week I bought a book for $3, only to find out that people were buying two for $5! What a rip-off! And I could throw in some things about how the internet is a bit like a bazaar, but I hear prices aren't always fixed at those things either!

    C'mon people -- why is anyone getting all worked up over this thing? Amazon is not ripping people off -- they're running a business. Searching around on the Amazon might have found you a better price, but everyone who paid the higher price agreed to that price -- no harm no foul. Maybe some customers are gonna be a bit upset at not having gotten the best deal, but that doesn't make Amazon "bastards" and "crooks"...
  • by zpengo ( 99887 ) on Wednesday September 13, 2000 @04:53AM (#783104) Homepage
    Raise the price of *everything* by three cents? I doubt that it's enough to drive customers away, but they could make tens of thousands of dollars more without the unpleasant publicity.

    I can't wait to see the Slashdot headlines: "Your Rights Online: Amazon Scamming People out of Three Cents."

  • So which was it... a mistake or an experiment?

    I'm sorry, in this world, it is possible for a big company to simultaneously be doing a pricing experiment AND have some incorrect prices in their database.

    You see, they are not mutually exclusive events. Therefore, your question, "So which was it?" does not really apply.

    -thomas


    "Extraordinary claims require extraordinary evidence."
  • by StoryMan ( 130421 ) on Wednesday September 13, 2000 @04:56AM (#783107)
    Maybe I'm not "getting" it, but why would Amazon conduct this sort of test in the first place?

    If I were a retailer -- especially a big one like Amazon -- the only "testing" I'd do would be something along the lines of the Frank Zappa test: either you're dead or not. (Or, in the case, of Amazon: either we have the lowest price or we don't, period)

    Zappa once joked (and I'm paraphrasing badly here -- if someone knows the complete context or quote, I'd appreciate it) that all the "probability" testing for crashing in an airplane or getting in accident or falling off a building is fucking absurd: the only real test for "survival" is a 50-50 chance: either you walk out the door and die, or you walk out the door and live. It's pretty simple.

    I'm not a math guy, but I think about Zappa's Law lot -- especially these days when everybody is citing statistics about the chances they'll lose money, the chances they'll go out of business, the chances Napster will cut their business by X% -- whatever.

    The only thing Amazon is doing by conducting the tests -- and, yes, even by refuding the money in an *enormous* gesture of goodwill and humanitarian appreciation (this is sarcasm, for those so impaired) is saying: look, we're not offering the lowest price, we're offering a *price* -- and with our price, you can take it or leave.

    As a competing business -- B&N, whatever -- I'd jump on this and say, "Look, we won't fuck around with your head or your pocketbook. We'll give you the lowest price. No games, etc. etc."

    To me, that'll earn my business. I don't care about personalization (contrary to what Microsoft says I *should* care about), I don't care about targetted e-mail, targetted advertising (contrary to what *sigh* even my beloved TIVO thinks) I care about the lowest price.

    How come none of these places are asking me, Joe Consumer, what really matters? How come they think that if they send me advertising "targetted" to my demographic that I'm gonna think, gee whiz, thanks for the e-mail! I'll get right on your site and buy something?

    How come they don't think: okay, consumers are savvy, let's not muck around with all this personalization stuff, let's just give them the goods, give it to them cheap, and make it easy to return if they don't like it.

    These fucking ad men (and women) are Microsoft drones. They'll buy the latest commerce site server and think they're doing everybody a favor.

    Well fuck that. They don't do *everybody* a favor because I'm someone and I don't give a shit about all this stuff. I just want the lowest prices. I don't need a "web experience". I don't need videos and snazzy graphics. I want low prices.

    Talk to me, you ad men and women. Talk to me, you market testers.

    I'll tell you want I want, and what (I'd bet) a good chunk of consumers want. I don't want frills, I don't want flash (Macromedia -- or the more general kind) -- all I want is a little savings of both time and money.

    That will make me smile. That will make me happy. And that will keep me coming back.

  • by Mindwarp ( 15738 ) on Wednesday September 13, 2000 @05:14AM (#783108) Homepage Journal
    Dear potential Class Action Lawsuit participant,

    Thank you for your recent purchase. As you are aware, our Market-droids recently came up a plan for ripping-off our customers without them being aware of it. As we are desperately out of touch with public opinion, and woefully ignorant of illegal trading practices, we decided to implement their plan. Unfortunately someone spotted this and we're now in some really deep shit.

    In an effort to place some spin on this situation, we're refunding the money that we ripped you off for. Not only that, but we promise that if you notice us ripping you off in the future, we'll refund that money too.

    We value your business and appreciate your trust; after all, without your complete and total trust we'd never have a hope of pulling off anything as underhanded as this. We hope that you will continue shopping with us. Really. We need your business, 'cos we're hemorrhaging cash faster than we can possibly hope to sustain and sooner or later our Venture Capitalists are going to notice.

    Hugs and kisses, Amazon.con

    P.S. You're not using any '1-Click' technology in any of your software, are you?

    --
  • How is the boycott of Amazon going?
    AFAIK, Amazon still has yet to show a profit, and has about a year's worth of vulture capital left. This is when the boycott will start to bite, when the free money starts running out.
    Unfortunately, Amazon is still the City's (or Wall St for you septics) dotcom darling, and that will probably continue until the second round of VC funding; all the greedmongers will be creaming themselves to get in on the deal. Only if the cash runs out a second time will the time of reckoning come to pass.
    I've never used Amazon for anything other than looking up the ISBN of a book, and won't until they drop their patent. So, is there any formal "stand up and be counted" site, somewhere where I can digitally sign my name and tell Bezos where he can put his one click patent? Because until Jazzy Jeff B and the Patent Abusers can show their shareholders "this is a list of people who will never buy anything from us. We drop our patent, and they will buy things from us. Our increased customer base will offset any losses if anyone uses the one click idea.", they are potentially opening themselves up to all sorts of legal trouble from shareholders trying it on with "due diligence" lawsuits...

    Strong data typing is for those with weak minds.

  • by theonetruekeebler ( 60888 ) on Wednesday September 13, 2000 @05:17AM (#783115) Homepage Journal
    One line out of the Amazon [amazon.com] letter bothers me:
    We also wanted you to know that if we conduct any price tests in the future, all customers who order items affected by these tests will automatically be refunded any price difference at the conclusion of the test, thereby ensuring that they will pay the lowest available price.

    Are they encouraging us to gamble? Picture this: a DVD you really want is going for $30. If you thing there's a chance they may offer it to someone else for $25, that means you're gambling on a $5 refund somewhere. So maybe this is a way of luring people into paying full price on certain items in the hopes Amazon will adjust the price down and give you some money back.

    Okay, conspiracies abound. But I know that if an online business came out and said "one out of every hundred purchasers will randomly receive a five dollar credit towards their next purchase," the gubment would go nuts.

    --

  • If you're willing to pay what Amazon charges, then what do you have to complain about? If the deal you're getting isn't good enough, shop somewhere else. Last time I looked, I didn't see a "guaranteed to be the best price" slogan anywhere on their site so they have a right to charge you any price they damn well please. And if you don't like it, there's plenty of alternatives.
  • by dkscully ( 42850 ) on Wednesday September 13, 2000 @04:16AM (#783117) Homepage
    Perhaps I'm just cynical, but isn't this just a nice PR exercise by Amazon, along the lines of, "Oh hell, they spotted us, if we give them back their cash, perhaps they'll say we're still OK people, except for that one-click thing, anyway".

    *shrug*

    It could, of course, be completely genuine.

    I noticed that Amazon.co.uk had reduced the price of an item that I'd pre-ordered, and emailed asking them to reflect the price change in my order, which they have done.
  • by Bob McCown ( 8411 ) on Wednesday September 13, 2000 @04:17AM (#783118)
    ...if this was actually an 'experiment', or if they thought they could get away with it? With all the bad press they recieved over this, I would assume the later.
  • by kmcardle ( 24757 ) <<kmcardle> <at> <adelphia.net>> on Wednesday September 13, 2000 @04:17AM (#783120)
    Dear Amazon Customer:

    Not only were we stupid to do the price adjustments, we're really sorry about patenting the mouse click. We were just kidding about that one. As soon as we run out of vulture capital, we will close our doors, shutdown our website, and donate the patent on the mouse click to the FSF.

    Sincerly,

    Jeff Bezos
    --
    then it comes to be that the soothing light at the end of your tunnel is just a freight train coming your way
  • As you may be aware, we occasionally test various aspects of our web site--design, layout, and other features--for brief periods to determine how they resonate with customers.

    And I thought that ringing in my ears was from falling asleep with the headphones turned all the way up too many times.
  • Suppose you're on top of the Empire State Building and want to get down to the sidewalk. You could either jump off (faster), or take the elevator down. They both have only two outcomes: You live or you die. Which do you choose?

    If you chose the elevator, good for you: you understand why having two outcomes is not the same as having a 50-50 chance.

    If you chose to jump, well, to quote Niven and Pournelle, "Think of it as evolution in action..."

  • Presumably you also object to:

    • Discounts for Seniors, members of AAA, Diners Club, etc.
    • Frequent buyer programs
    • coupons
    • Happy Hour
    • Year-end clearance sales
    • N-th customer promotions
    • Buy two, get one free

    Nobody has any reasonable expectation that the price they pay will be the same from moment-to-moment regardless of the circumstances under which they buy. Nobody claims there's a conspiracy when two gas stations in the same franchise several blocks from eachother charge different prices, or different franchises across the street from one another. (In fact, quite the opposite: people charge price fixing when there's too much uniformity of price.) That's precisely the reason that some retailers offer a price guarantee as a selling point ("If we lower the price within the next 30 days, we'll refund the difference!").

    If the price changes were separated by days, or were explicitly linked to things like which physical store they went into, or membership in a particular organization, nobody would even blink. It's only because the changes were happening at online speeds with no particular promotional effort that anyone thinks otherwise.

  • That link refers to an article NOT about the original issue. It's about a problem people are trying to relate to it. I see it as just another Amazon screwup. In the "testing" that was done, no one was charged a price they didn't agree to.
  • But they still didn't have to do it. I really wonder what percentage of customers ever even heard about it? 1%? .1%? .01%? It's become a sport to find these "conspiracies" on Slashdot and Cnet.
  • Ahh, but you miss the point: Amazon ships the product and charges the inflated price. At this point they get the money from your credit card. They invest the extra, and 2 months latter refund it. So they do get access to your money for that time.

    Note that the above is somewhat a moot point becuase AFAIK Amazon.com is still losing money on most/all sales.

  • I think this was a neat test by Amazon. They're becoming a huge storefront, but in the transaction side, they're losing touch with their users. How much will users pay for a DVD? Will making a DVD $2 cheaper lead to more sales? Instead of making 30% off the top and getting 1000 sales, will making 20% of the top and giving the consumer a 10% discount lead to 2000 sales?

    Just like Amazon sent out a notice for users to test out their new navigation before it went live to get feedback, I think this is a great way for Amazon to get feedback. In addition to conducting the test, afterwards they gave EVERYONE the discount?

    I see nothing wrong with this, in fact I see it as an ethical way to do product pricing testing and usability testing.
  • At the time you felt $30 was worth it. So what's the problem? Your friend just got lucky.
  • but doesn't this invalidate any research they might want to do? Presumably they are trying to find out what the maximum price they can get people to pay is. So by saying this, in future people might see that the price is higher, but think its a test, and pay the higher price believing they will get a discount. You might choose to shop at Amazon for convenience (you already have an account set up, you don't at a rival), trust (you know that they will deliver because they delivered in the past) or any number of other reasons, and this last thing could swing the balance for you...
  • In other words... "Thank you for being a guinea pig at Amazon.com. We'd like to let you to know that if we conduct further tests in the future, you will be refunded the difference. Unfortunately we won't tell you when we've perfected this profit-optimisation system and implement it permanently, nor will we offer refunds. Of course, you still trust us, right? "

    --
  • These prople pull their little pricing stunt and get caught. Now they reverse it and say were giving discounts. Their not-so-informed customers will say "Wow, aren't these guys great? They're giving me a refund I didn't ask for!"

    These bastards are going to come out smelling like roses.
  • We also wanted you to know that if we conduct any price tests in the future, all customers who order items affected by these tests will automatically be refunded any price difference at the conclusion of the test, thereby ensuring that they will pay the lowest available price

    = When it's NOT a test, we'll fuck ya.

    -Jon

  • The problem is not that they are charging whatever price they want.... the problem is that they are (most certainly though I have no proof) using every bit of data they can gather through cookies and doubleclick and invisible images etc. With all the demographic data they can gather they can start trying to guess (with some degree of accuracy) how much they can get away with charging you.
    Now when you arrive at amazon, what they would want is to ID you as a cross-shopper and therefore ensure they give you the lowest price in the marketplace, it might recongise me as a convienince shopper who would rather save the 20 minutes and not care if it costs an extra few dollars. What happens when I decide to use my friends PC and then end up gettting a higher price (or lower) on that purchase? We here on Slashdot don't seem to like the idea of user data tracking at the levels that would make this useful to Amazon, and I find repugnant the idea that they would use these systems for a real world purpose (as opposed to generating stats). Should a shop be able to surupticiously mark you down as an easy touch? Used car salesmen have done it for long enough and while we all agree that it is a case of "buyer beware" is there not a point at which it is criminal?
  • by david@ecsd.com ( 45841 ) on Wednesday September 13, 2000 @05:35AM (#783150) Homepage
    Jeeze, here in Michigan, if you buy something which scans different from what the price tag says, you get 10 times teh differences up to five bucks.

    Perhaps the Michigan Attorney General should be looking into this.

    Dave

  • Probably the best one I know was at An Open Letter to Jeff Bezos [oreilly.com] in the O'Reilly Website [oreilly.com], however they cut off the signatures at 10,000 (of which I was one--no brag, just info). Anyway, if even a third of the ten thousand who signed up are techies who buy as many books as I do in a year, that would mean that Amazon is losing out on the opportunity to profit on $100 million dollars annually in sales just on books, not counting CD's, etc. Wouldn't it be fun (if a person were lucky/unlucky enough to own some stock in Amazon.Com) to stand up and mention that little bit of info at an Annual Shareholder's meeting...?

    By the way, if anyone in the /. community knows of an active list, let us all know so that we can sign there as well.

  • Make sure to tell Amazon how you fell about their "experiment". Send an e-mail to feedback@amazon.com. I did. I don't feel any better, but I did inform them that I will no longer be shopping on their website. I have spent more than $1000.00 there this year.

  • Of course your right. In economic theory, there is a tenet that says that nobody can be "ripped off" as long as they get the product they paid for in the conditions they asked for. What does this mean?

    Let's say, for example, I sell wooden chairs, all the same. I don't have prices displayed, but I am willing to sell these chairs at a minimum price of $10. Now, here comes Customer A. For some emergency reason, they absolutely positively need a wooden chair. They ask for a price, and I, sensing their hutrry, say "$500". He says that's high, but he'll pay it. He hands me the money and leaves.
    In walks Customer B. They also want a chair, but not as badly as the first customer. We haggle for 15 minutes, and finally decide on a price of $65.

    Did Customer A get ripped off? Of course not. They agreeed to pay $500, so they were not "ripped off". At the time, $500 was a fair deal.

    This, friends, happens everywhere. Someone mentioned automobile dealerships. Well, it happens with airline tickets as well; it even happens with colleges. They charge everyone a too-high price (I am thinking more Ivy League here), and then if you can't pay the price they lower it JUST enough so you can buy (old) bread and feed yourself, but nothing else. Is it good business sense? Depends on your view of things. It creates more profits, but at the risk of alienating your customers; this diminishes profits in the long run.

    And no, this bad press won't hurt Amazon THAT much. For every well informed /. and C|/net reader, you've got other people that are shopping at Amazon because it has a good price, or they saw an ad on "Tee-Vee".

  • by NetJunkie ( 56134 ) <[jason.nash] [at] [gmail.com]> on Wednesday September 13, 2000 @04:25AM (#783163)
    People agreed to buy an item at a price. Why should Amazon apologize? I don't have to give the same price to everyone on items I sell. I think it's very admirable what they are doing by refunding the difference.
  • This is all they can do to save face
  • by umbra.lux ( 181874 ) on Wednesday September 13, 2000 @04:25AM (#783165)
    According to the Register, Amazon has had some other problems with pricing as well...seems they offered DVDs at one price and then refused to sell unless the customer paid a higher price.
    Even worse, they have absolved themselves from all responsibility for a customer's privacy.
    See http://www.theregister.co.uk/content/1/13210.html for details.

  • Raising prices? OH NO! Higher prices aren't really a good thing, but it isn't some crime. They didn't tell the consumer one price and then charge another. People saw what they were going to pay!
  • And in the meantime, while they have your money, they can invest it. Then, when THEY consider the 'experiment' over, they can give you a refund.

    More seriously, that's an integral part of some financial institutions revenue. Ever wondered why banks process charges to your accounts way faster than they process deposits ? Even taking the necessary communication between banks (after all the money has to come from somewhere) doesn't satisfactorily explain the two to three (business) days difference I have observed in some cases.

    Sure, over a few dollars it doesn't make a difference, but even a couple of days' worth of interest can add up for a bank.

C for yourself.

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