Amazon Price-Check Program's Critics Have The Wrong Facts And The Wrong Attitude

The Amazon price-check promotion is getting mercilessly blasted by authors, a U.S. Senator, a retail trade group and various others. The strangest part is that so many are getting the actual specifics of the Amazon program wrong.

Booksellers were up in arms about Amazon encouraging people to go into their local stores to buy on Amazon, despite the fact that consumers have been doing the same thing for as long as Amazon has been around and the fact that—to be nitpicky—books were excluded from the program. U.S. Senator Olympia J. Snowe (R.-Me.) issued a statement that "incentivizing consumers to spy on local shops is a bridge too far."

That may be true, but the price-sharing part—the spying the senator is referencing—was excluded from any incentives. The only thing Amazon was incentivizing people to do was to buy from Amazon, which seems the whole point of a promotion. The E-tailer layered it on top of its price-check app, which has also been around for quite some time and is only one of many mobile price-comparison apps (RedLaser being the most well-known) out there today.

Snowe's statement also said "we should remember that our local restaurants, bookshops and hardware stores are the economic engines in our communities." Bizarrely enough, none of those groups (restaurants, bookshops and hardware) was part of the promotion.

Restaurants? In an Amazon promotion? We don't need to read the terms and conditions to raise our eyebrows at that one. The senator could have at least referenced local toy stores, sporting shops and DVD merchants, as they at least were actually covered.

Those price incentives, as we discussed last week, were impressively anemic and not likely to persuade anyone to do much of anything. The whole promotion lasted just 26 hours, and it had so many limitations in terms of the products covered (it was only Electronics, Toys, Sports, Music and DVDs) that it really begs the question: Did critics even understand what they were attacking?

An argument can be made that Amazon went out of its way to not clarify these details as part of a deliberate effort. Let the media and protest groups get the facts wrong, and let consumers think the incentives are much higher and for more products than they are for. Amazon gets what it really wants: lots of attention for its me-too mobile price-check app and lots of consumers trying it in lots of stores.

And all the while, Amazon—when and if it chooses to respond—can simply point to its Terms and Conditions and say that it didn't actually do much of what it was accused of. Win-win. It gets the buzz for its app, with an ironclad alibi in its pocket that it did little wrong.

Last week, the Retail Industry Leaders Association (RILA) said their concern was really about the inequity of the state tax system.Last week, the Retail Industry Leaders Association (RILA) said their concern was really about the inequity of the state tax system, suggesting that by selling within stores, Amazon was making a mockery of the rules that allow it to not charge sales tax while inside a store that has to. It was a very fair point.

Senator Snowe's statement, while missing the mark on the specifics, was trying to communicate a broader point, said Snowe Communications Director Chris Averill. Namely that the "whole purpose of the (promotion) was suspect" and that the price-spying and the incentives were married in what Amazon put out publicly, which is true. It was only in the fine-print of the Terms and Conditions that the exclusions and limitations became clear, he said.

Even though Amazon excluded bookstores, Averill said, "chances are (shoppers) went to the bookstore to get the extra discount." The lack of any incentive for books wouldn't be clear until much later, if the customer even noticed.

As our Legal Columnist, Mark Rasch, pointed out in this week's column, Amazon engaged in this "send people to stores to get sales and information" strategy while it is one of the few E-tailers that bans others from doing the same to it.

How is this campaign truly different from ones where retailers match—or better—coupons from rivals? If Amazon's customers want to pass along pricing information for free to Amazon merely because Amazon asked them to, that may be strange, but it's hardly unethical. By the way, the point of the price-comparison app is such that it will help local merchants, as long as their prices are indeed lower than Amazon's. Amazon's prices have never been that low—it pushes convenience, not savings—so this could end up helping brick-and-mortars. And if they are indeed charging a lot more than Amazon, don't they deserve to lose that sale, especially for customers willing to wait for shipments and to pay—where necessary—for shipping charges?

Retailers need to compete—and they absolutely can win—by pushing attributes that can't be so easily matched by online rivals: better pricing, immediate gratification, enjoyable shopping experience, ease-of-returns, friendly and helpful store associates, and products that can't be obtained elsewhere. If a retailer loses a sale because someone offering its customer one dollar off a $20 purchase—when it's a lot easier to walk up to the POS than to manually enter pricing and go through the rest of the Amazon mobile process—that may be a sale that deserved to be lost.