This is crazy! How a set of wrenches sold for £7 on Amazon is worth 76% MORE on Prime: Most loyal customers may be overpaying for items
A Mail on Sunday investigation can reveal that Amazon’s most loyal customers may be overpaying for items as a result of the online shopping giant’s opaque pricing practices.
More than half of UK households spend £7.99 a month on a subscription to the retailer’s Amazon Prime membership programme. Membership offers benefits such as free one-day shipping and access to an online library of movies, songs and e-books.
Prime members also get exclusive discounts during a two-day sale called Amazon Prime Day that takes place on Tuesday and Wednesday this week.
Heist: Silverline wrench set £12.35 for Amazon Prime members but only £7 for non-members
But the convoluted pricing system means that paying Prime members can charge more for items than shoppers who didn’t sign up for a membership.
During our investigation, we provided two Amazon customers with a shopping list of items sold on the website. One buyer had a Prime membership, the other did not. A Prime member was shown the same or lower price on a number of items, but in some cases the price was higher.
For example, the advertised price of a set of Silverline spanners was £12.35 for a Prime member, but only £7 for a non-Prime buyer. A pair of Pride Rainbow Feather Wings cost £10.19 for a Prime member, but were nearly £2 cheaper for non-members with a price tag of £8.49. In both cases, even if shipping costs were factored in, the Prime customer would pay more, even though they might get their items a little faster.
James Daly, founder of consumer group Fairer Finance, says it is “unacceptable” for Amazon to show higher prices to Prime users, and doubts it does so “because it knows members are likely to be less price-sensitive.” He adds: “We need regulators to act quickly to stop this, not least when the perpetrator is one of the UK’s biggest retailers.”
Amazon functions as an online marketplace, which means that the same product will be available from different sellers at different prices. As part of our investigation, we compared the default prices most prominently displayed on the website. These prices are shown in large print immediately below the product name. They are also the price a buyer pays when they click “add to cart” or “buy now” without specifying which retailer they would like to buy from.
Amazon says customers can scroll down and select an alternative if they don’t want to use the standard option. But consumer rights expert Martin James warns that it is not clear to shoppers that they can opt out of the default price and choose between other sellers and the prices shown at the bottom of the web page.
“It’s shocking that paying for a premium service can mean you’re actually paying more for some items,” he adds. An Amazon spokesperson said: “One of the unique characteristics of Amazon is that multiple sellers can offer customers the same product in our store. All customers have access to offers and prices for this product. Customers can view all available offers by clicking on “New” or “Used” under the featured offer on the product details page.
“We provide an offer that predicts the best shopping experience for the customer based on a number of factors, including price and speed of delivery.”
Our findings come as the Competition and Markets Authority (CMA) revealed last week that it is investigating how Amazon decides which sellers to allocate a default price to. The probe is part of a wider investigation into the online retail giant’s suspected anti-competitive practices, which it said could lead to customers “paying more for products, being offered lower quality products or having less choice”.
Sarah Cardell, Chief Legal Officer at the CMA, said: “Millions of people across the UK rely on Amazon services for fast delivery of all types of products at the touch of a button. This is an important area, so we are investigating it carefully.”
James added that Prime members planning to take part in Amazon Prime Day shouldn’t assume they’re getting the best deals just because prices are displayed as deep discounts.
“Check the price trackers and compare them to other retailers to make sure you’re not paying the same or more than you would on any other day,” he said.
Prime members can also sign out of their account – or use private or incognito mode on their internet browser – to compare prices and scroll down the list of retailers to make sure they’re getting the best deal.