September 26th, 2016
Categories: Fine Print, Prices, Promotions
I’m not a fan of automatic anything. When I buy OTC items from a drugstore website, I’m asked if I’d like a monthly order of shampoo, toothpaste, vitamins or makeup. No thanks.
So I didn’t know about Amazon’s Subscribe and Save program where people sign up to get repeat orders of staples like coffee or trash bags. It should be called Subscribe and Sometimes Save. It’s a great example of people signing up for something they haven’t looked into carefully and being duped into thinking they are always getting a good deal.
According to Brian X. Chen in his New York Times article, “Subscribe and Save on Amazon? Don’t Count on It,” the company’s pricing model doesn’t always work out in the customer’s favor. “Any sticker shock, analysts said, may be the result of Amazon’s complex pricing system coming into conflict with consumer expectations of a traditional subscription.”
He wrote that Amazon “frequently adjusts item prices based on a sophisticated set of variables like supply and demand, time of day and prices offered by competitors.” He shared the insight of Jared Wiesel, a partner at consulting firm Revenue Analytics. It “is the company’s way of making it look as if you are always getting the best deal.”
Chen identified one customer who paid $10 for gum when signing up and was charged $100 on the repeat. “Prices of most items, including dishwasher soap and toilet bowl cleaner, changed frequently. As often as weekly, prices rose, dipped and rose again like a roller coaster. In extreme cases, prices for items like instant coffee and napkins jumped between 90 and 170 percent.”
- A 30.5 oz tub of Folgers ranged from $6.64 in June to $12.50 in August.
- Vanity Fair napkins moved from $7.94 in May to $21.46 in June/July and $15.36 in August.
- More high/lows include an air purifier filter and humidifier filter, $18.06 to $33.24 and $$4.67 to $11.27 respectively.
Participants are given a chance to opt out. Amazon sends them an email 10 days before a delivery with the price they’ll be paying and they can cancel. I suppose not everyone reads them.
The trouble with the concept, according to Wiesel is: “I think they’ve violated the psychological concept of a subscription with their customers in changing prices like this. When people think of a subscription, they think of locking in a set cadence of receiving a good.”
Chen offers a solution: “If you truly want to save money on Amazon, one approach is to sign up for price alerts on Camel Camel Camel to get an email when a price drops to a desired amount. When that happens, manually reorder — yes, that’s an extra step — your instant coffee, toilet cleaner or lint rollers.” [Camel Camel Camel is an Amazon price tracker Chen explained.]
Why should Amazon change an eyelash on this or any other of its programs? In the last 17 months its stock price closed at a high of $800, more than doubling in 17 months.
Do you automatically receive anything from Amazon or any other company? Have you fallen for a deal that seemed great only to learn it’s more complicated—and not as great–as you first thought?