Amazon Ends Free-Shipping Promotion

A controversial free shipping offer that generated significant customer backlash has been pulled by Amazon.com (Nasdaq: AMZN) after two weeks.

The offer, which promised visitors free shipping when they bought two or more items, in any combination, from the e-tailer’s book, music, DVD or video stores, was part of a test run that was scheduled to end this week, the company said.

The policy became enveloped by negative customer criticism because Amazon simultaneously raised prices on certain products.

Amazon’s reversal on free shipping came the same week that Barnesandnoble.com (Nasdaq: BNBN) implemented its own free shipping offer.

“The [timetable] for the test offer went pretty much as planned,” Amazon spokesman Bill Curry told the E-Commerce Times. “We thought it would be about two weeks. There was no correlation to the Barnesandnoble offer.”

Evaluation Pending

The fine print of Amazon’s offer warned visitors that the company has changed its pricing “on some books.” Amazon said that it had lowered the prices on some products, but “reduced discounts” on others.

Despite the apparent criticism, Curry said no evaluation has yet been made on how the offer was received by customers.

“We are in the process of analyzing the data and customer feedback to evaluate the offer,” Curry said. “We don’t have a particular timetable for the evaluation results.”

Eye on the Competition

On Tuesday, Barnesandnoble.com announced it was offering free standard shipping on customer orders of two or more items from the company’s selection of books, CDs, videos, DVDs, magazines and e-books.

In an apparently direct jab at Amazon, Barnesandnoble.com said Tuesday that its “low product prices remain unchanged.”

However, Curry said earlier in the week that the “overwhelming majority” of Amazon customers had saved with the promotion, in spite of the price increases on some items.

E-tailer reversals on shipping charges are nothing new. Over time, computer and electronics e-tailer Outpost.com (Nasdaq: COOL) has made several changes regarding its free shipping policy.

Risky Game

According to a recent Jupiter Media Metrix report, almost two-thirds of consumers have been deterred from completing online purchases because of shipping and handling charges.

Jupiter cautioned that companies looking to profit from order fulfillment run the risk of sparking customer distrust because three-quarters of Web shoppers factor in shipping costs before conducting an online transaction.

To minimize customer misgivings and merchant risk, Jupiter advised retailers to regard shipping and handling charges as a “breakeven proposition.” Moreover, the study said e-tailers need to revamp the methods by which they calculate these charges.

“Consumers are wiser to the true costs of shipping than retailers think,” the report said.

1 Comment

  • What percentage of people really do price comparisons on the Web? I have often felt that people shop brands on the Web more than they price compare, that people want to use the Web to save time more than they want to save money. That in the long run, people would rather just type in http://www.Amazon.com once, even at the cost of a few dollars.

    So my question is, does it matter what Amazon charges if the others are still playing catch-up?

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