Amazon Accused of Raising Product Prices on 'Prime' Members (Video)
Amazon announced its plans today to raise the yearly fee for its "Prime" membership next week.
According to TIME, Amazon Prime memberships will go from $79.99 a year to $99.
Amazon says current members will pay the $99 when they renew their Prime membership, but many folks are rushing to sign up to get a year for $79.99 before the price increase.
One of the benefits of Amazon Prime is free two-day shipping on some products, but two recent lawsuits claim that shipping is not so free after all.
Both of the lawsuits, filed today in Seattle, claim that Amazon is encouraging its sellers to jack up product prices by an amount equal to normal shipping charges, which results in higher referral fees per product. Those referral fees are then paid to Amazon by the sellers.
“The bottom line is the free shipping that Amazon offered to its Prime members wasn’t free,” Kim Stephens, lawyer for one of the plaintiffs, told ABC News (video below)
“An item included in its stated price the cost of shipping, but you thought you were getting [shipping] free,” added Stephens. “But together they would roughly equal the cost Amazon is charging Prime members for so-called free shipping."
According to Stephens, a customer who is not an Amazon Prime member can actually pay less for a product and shipping.
Non-Amazon members can get free shipping on most items for a minimum order of $35, but there is no minimum order on Amazon Prime.
Amazon has not commented on the lawsuits.