Oct 7, 2012
In late 2012, Amazon.com ran a television commercial touting itself as the “re-inventor of normal.” Meanwhile, the company was altering its own normality, reducing discounts that customers had enjoyed for years through the Subscribe & Save, Amazon Mom and Amazon Prime programs. Over the years, Amazon’s willingness to sacrifice profit margins for high sales volume earned the company thousands of dedicated customers who had come to rely on them for affordable shipments of everyday essentials from bottled water to bathroom tissue. However, Amazon’s “new normal” has left some customers feeling cheated.
About Amazon Subscribe & Save
Amazon first announced the Subscribe & Save program in 2007. Through Subscribe & Save, customers could receive a 15 percent discount for buying common household and grocery items by the case if they agreed to receive additional shipments in the future automatically. Subscriptions required no commitment and could be cancelled without penalty. Customers could also receive additional shipments of items at the same discount anytime they liked. Subscribe & Save helped savvy customers save hundreds of dollars per year on groceries and other household items. Programs such as Subscribe & Save helped propel Amazon’s stock price from around $40 in early 2007 to over $90 at the end of the year. The price has since risen to over $250.
Amazon’s Profits Decrease
In early 2012, Amazon reported that, in spite of the fact that sales had increased 35 percent over the final quarter of 2011, net profits were down 57 percent. Rich Smith of The Motley Fool believed that Amazon’s discount programs had cut into the company’s profits, but that the discounts were necessary to get people into the habit of shopping at Amazon so they would continue to do so when Amazon one day had to begin collecting state sales taxes. However, Amazon had something else in mind: having put customers into the mindset of buying virtually everything from them, they were about to begin slashing discounts as deeply as possible to see what their dedicated customer base would bear.
Amazon Cuts Subscribe & Save Discounts
In late 2011, Amazon began to lower the discount on many Subscribe & Save items from 15 to five percent. Customers in the habit of creating and cancelling subscriptions at will suddenly found that they were paying ten percent more for their usual purchases. Amazon’s Subscribe & Save Help page played it off like nothing had changed, stating “The discount on Subscribe & Save eligible products varies by manufacturer and product category.” Since the beginning of the Subscribe & Save program, Amazon had pledged to honor the original 15 percent discount on all active subscriptions if the discount for new subscriptions changed. However, some customers began to see cancellation emails announcing that Amazon was “no longer able to offer” certain items at a 15 percent discount under the Subscribe & Save program.
Amazon Ends Free Discounts for Moms
Around the same time, things were beginning to change for Amazon customers who had subscribed to the Amazon Mom discount program. In 2010, Amazon Mom was announced as a way to help Amazon customers save money on the two things that every baby requires massive quantities of: diapers and wipes. Simply for signing up, parents could enjoy free two-day shipping and 30 percent discounts on purchases of diapers and wipes. In 2012, however, the savings became less significant. Amazon lowered the discount on diapers and wipes to 20 percent and required customers to sign up for Amazon Prime at $79 per year to retain the discount past an initial three-month trial period. Parents who stuck with the Amazon Mom program and joined Amazon Prime could still enjoy less expensive diapers and wipes whenever they needed them — at least for a while longer — but many parents were dismayed by the fact that they suddenly had to pay for lower discounts than they previously received for free.
Subscribe & Save Less
By late 2012, Amazon had reduced the discount on all Subscribe & Save items to five percent with the exception of diapers and wipes, which remained at 20 percent for Amazon Mom members who upgraded to Amazon Prime. In October, however, some customers who created new Subscribe & Save subscriptions were surprised to see that the estimated shipping dates were up to one month in the future. Without notice, Amazon had changed the Subscribe & Save program so orders were no longer shipped immediately. Instead, all Subscribe & Save orders — even new ones — would ship only on the customer’s “scheduled delivery day,” once each month.
In the past, a customer who ran out of a Subscribe & Save item could have it re-shipped immediately at the same discount. By creating a scheduled delivery day, Amazon has eliminated this benefit; the discount no longer applies to unscheduled shipments. This is true even for Amazon Prime members; if your baby fails to use the bathroom on a regular schedule, the discount you’re paying for will not apply and you’ll pay full price for your diapers and wipes.
Amazon’s Response: No Comment
We contacted Amazon and requested a response regarding the concerns addressed in this article. In the message, we asked three direct questions:
- Why weren’t customers notified that the Subscribe & Save discount was decreasing?
- Why weren’t customers notified that Subscribe & Save items would no longer be shipped immediately?
- Why can’t customers receive the Amazon Mom/Amazon Prime discount on diapers and wipes that they’re paying $79 per year for every time they order?
Amazon declined to address the questions:
I understand you are concerned with the changes for our Subscribe & Save program and I’m very sorry that you were not notified.
Don’t worry; this change is actually only applied for new subscriptions.
For your inquiry about Amazon Mom discount on diapers and wipes; as long as you’re an active Amazon Mom member and have an valid Prime membership, we’ll add the additional Amazon Mom discount to the discount you receive when you select Subscribe & Save delivery.