Defining Consumer Manipulation

Posted by Scott on Jan 5th, 2007

I’ve had a couple of lively debates about my last Amazon post with some colleagues. To explain my own views more clearly, I’ve used a hypothetical example that if Amazon were to put an obvious, large, blinking notice in your shopping cart when the price of your item had changed, I’d not have much of a problem with their practice. The crux of the issue is that Amazon is using one price to lure you into putting the item in your shopping cart, and then another when you pull out your credit card to pay for it, and is trying to do so in a way that you won’t notice. That’s why the brick-and-mortar analogy is so apt.

A second issue is one of time: a day is a reasonable time to leave an item in your shopping cart and expect its price to remain constant. I’m not arguing that people should be able to leave items in their carts for weeks or months and pay the same price – that’s just gaming the system the other way.

If Amazon made this process more obvious, they’d obviously stand to lose a lot of customers. I believe that’s a strong sign that something is wrong with this practice, and Amazon should know better.

Another Reason to Not Shop at Amazon

Posted by Scott on Jan 3rd, 2007

L.A. Times reporter David Streitfeld wrote the other day that he’s observed and reproduced the fact that Amazon subtly raises prices for customers shopping for obscure books, if they leave them in their on-line shopping carts for a day. The price increases were modest but noticeable (less than 5%), but what’s more bothersome is the feeling that Amazon is “gaming” you, its customer.

While some might say this practice is a better approximation of true free-market economics, Streitfeld makes an apt analogy of how people would react if this activity occurred at brick-and-mortar bookstores:

Imagine this: You go to a bookstore, browse, choose a couple of volumes. But you don’t want to carry the books around. So you ask the clerk to hold the tomes until Saturday, when you’ll come back to buy them.

When you return, the bookseller hands you the items but advises you that he’s raised the prices. “I knew you were hot to buy them,” the clerk says, “so I figured I could make a few extra bucks.”

I hope this article gets significant attention and gets people talking about the ethics of this practice. Even more so, I hope other booksellers take a hint from this controversy and post “truth in pricing” policies which clearly state whether they accept or reject this kind of consumer manipulation.

Please note I’m not arguing against price changes in general, which are a fact of life and have to happen. I’m talking about the situation which in the course of one day the price of something you want is increased, just because the vendor you’ve selected knows you’re preparing to buy it.

Amazon has a history of controversial business practices, including using its 1-click software patent against Barnes and Noble. The Free Software Foundation has updated their Amazon boycott page and is no longer running it, but it’s evident that the public reaction against Amazon made a big impact in this outcome. Let’s hope history repeats itself and Amazon is forced to re-think this business strategy.

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