Amazon.com Customer Service – Jeff Bezos backtracks on 30-day price guarantee policy!

"We see our customers as invited guests to a party, and we are the hosts. It's our job every day to make every important aspect of the customer experience a little bit better." -- Jeff Bezos

Regardless of Jeff Bezo’s take on Customer Service, the cue is clear from the fact that Amazon.com’s main page lacks a “Customer Service” link. Navigation to the “Contact Us” link is via the Help button and it is almost buried in that page!

Amazon.com epitomizes on-line retailers, as they have diligently decreased the downsides while embellishing the upsides. Adding graceful feel was their especially generous customer service department that attempted to gratify a good number of the customers who attempted to contact them. However, over the years, we are noticing more of the iron fist in the velvet glove of Amazon.com’s customer service.


This is our recent experience with their customer service department: We ordered the “Presto Pro EverSharp Electric Knife Sharpener” for $26.67 and noticed in a matter of days the price had dropped to $23.67 (an easy way to track price fluctuations is to add the item to the cart and use the “Save for later” button – at the next visit to the cart, Amazon.com conveniently informs you the variation since the item was added to the cart). Given Amazon.com’s 30-day price guarantee, if you contact customer support, they stand by to credit back the difference –Well! Not anymore! Here is what they wrote back to us:

…
Thanks for writing to us about the recent price change on "Presto Pro EverSharp Electric Knife Sharpener". I understand you bought this item from us just recently at a different price. Unfortunately, we cannot extend a refund to you for the difference between the original price and the lower price you saw posted on our website.
…
I understand you may have taken advantage of a 30-day price guarantee policy in the past. However, that policy was discontinued on September 1, 2008. …
This experience incremental with other slight incidents has impelled us to reassess our relationship with online purchasing:

• Amazon’s price guarantee promoted confidence in conducting business with them as Amazon’s pricing on items fluctuates frequently.
• We have never returned an item over the years mainly as it did not make business sense money wise and time wise. Overtime we have purchased items we would NOT have touched with a ten-foot pole had we seen it at a local retail store.

We frequent Amazon.com and our aggregate purchase from them is second only to Costco where we have a membership.

Objectively speaking, there are several downsides to online shopping.

1. You don’t see what you get and in some instances the corollary is also true - Customers mostly shop from a two dimensional view of the merchandise. To their credit, most online retailers attempt to provide detailed information, pictures, informative videos, and customer feedback of the products.
2. Absence of a physical returns counter - Returns are not as practical as with brick-and-mortar and hybrid retailers largely due to the lack of local venues to accept the merchandise. Online retailers usually honor 30-day risk-free return policy, but most require the customer to meet the return shipping.
3. Security Concerns – With brick-and-mortar retailers, it is entirely possible for shoppers to purchase merchandize and maintain anonymity by opting for a cash transaction. Such an option is nonexistent for online retailers. Inevitably a lot of information needs to be disclosed – for shipping, phone number and address are a pre-requisite, ditto with credit cards for payment.
4. Shipping – Shipping charges can add considerably to the cost of merchandise and can be a big competitive deterrent especially for low-cost items. Online retailers attempt to minimize the impact by offering free shipping for orders over a certain amount. Prompt delivery is another issue as an expected shipping timeframe is all one is assured. They do provide faster shipping options, but the bottleneck is merchandise availability for an almost-real-time inventory control.

Online retailers still compete well with brick-and-mortar and/or hybrid retailers as they have these factors in their favor:

1. Pricing – by eliminating the overhead involved in managing retail locations in comparatively expensive local neighborhoods, they can afford to price products better compared to competition.
2. Taxes – Online retailers are required to collect sales taxes on shipments to states where they have a physical presence only.
3. Convenience – The web promises to be a resource that provides ubiquitous selection, competitive pricing, and the lure of shopping away from a shop.

Over the years, the value realized from Amazon.com has gradually dwindled:

1. Pricing – With patience one can still purchase items at a very competitive price. One strategy might be to constantly monitor items in your wish list to come up with a range of pricing with the idea of purchasing it at the lowest price-point at a later point. While this would work, it adds to the hassle of online shopping, not to mention time, which, after all, is money.
2. Taxes – Currently Amazon.com collects taxes only when shipping items to the following states - Kansas, Kentucky, New York, North Dakota, or Washington. While this is projected as a benefit to customers, in reality it is short-term as use taxes are due on merchandize purchased through the Internet. Further, it is only a matter of time before other states introduce legislation that requires online retailers to collect taxes upfront.
3. Promotions and Cash-Back – For some time, the Amazon.com Visa card was a notable deal with 3% cash-back on everything purchased from the site and 1% elsewhere. Since then, competition has caught up and now better options are available. In fact, our preference now is the Amex Costco True Earnings card. Moreover, the quality of many of the deals at the site such as the Gold Box deal, Lighting deals, etc. have decreased over time. Amazon.com had an amazing promotion of rewarding customers with cash-back for using Amazon’s search-engine A9 – this reward was silently removed some time back.
4. Shipping – Amazon.com introduced a highly touted Amazon Prime service last year that promised unlimited FREE two-day shipping along with $3.99 one-day shipping for a fee of $79 per year. This could be an outstanding value, but we refrained from signing up because the value of the service is suspect. Specifically, they do not guarantee when the item will leave their facility – the promise of two days applies only after the item is shipped. Furthermore, this binds you to Amazon.com, as there is value for the $79 annual fee only if you commit to significant purchases from Amazon.com.

All said, our strategy-moving forward will still include Amazon.com albeit, at a much smaller scale. Rather than relying on Amazon.com for most purchases, we would opt to compare sites and try to come up with the best price and service option by using comparison shopping sites. This is especially true for low-volume specialized products. For high-volume products such as best-selling books and DVDs, Amazon.com or one of the other sellers selling through the site usually has a very competitive price and so it may not make as much sense to comparison shop.

And, what might all this have in the offing for Amazon.com. Not a lot for sure in the short-term, but our bet is on a brick-and-mortar Amazon.com retail shop popping up at our local retail center within a few years!

Related Posts:

1. Amex Costco True Earnings, Chase Amazon Visa, and Costco Executive Membership – A Reward Combination We Missed Out On.

Last Updated: 10/2008.