Amazon prices only 'guaranteed for one hour' shock

AFTER MY article on the strange and increasingly frequent price hike notifications that have appeared in my Amazon.com shopping cart (see "Inflation? Dynamic pricing, or what?"), we have INQuired Amazon.com, and the company's Director of Corporate Communications, Patty Smith, had the following to say:

"There are many possible reasons why you may be seeing the changes in price for items after you've placed them in your shopping cart. For example, many of our discounting structures include sales rank as a component (for example, in our Media categories, top sellers are more heavily discounted than non-top sellers). So if you put an item in your cart, and it changes sales rank before you buy it, the price is likely to change (our sales ranks are continually updated)."

That strikes me as odd, since in the traditional brick-and-mortar stores, it's often the products that are not selling well, the ones which are discounted so they start moving off the shelves. In the case of Amazon.com, and based on the statement of Ms. or Mrs. Smith, it seems that products which are doing poorly have their prices increased, which in turn would make such products even harder to sell. Brilliant!. While I don't know what items she is referring to by the "Media categories" statement (is it storage media?, music cds?), it still doesn't explain why, for instance, the price of many digital cameras which were placed in my shopping cart from early to mid-March, started showing the dreaded "increased price" alert message by March 29th. Here is a screen shot I took at the time:

Price of several digital cameras, strangely jumping by around $10 a couple weeks after I placed them in the cart. And more strangely, all cameras, of different brands, increasing its prices all at once

"Prices good for an hour" claim shocker

In her reply, Amazon.com's Patty Smith quietly dropped a bomb: "Generally speaking, once you place an item in your shopping cart, you're guaranteed that price for one hour.". It surely reminds me of an acronym I coined some years ago in the mailing lists: GIWYC! ( Grab it while you can). Sadly, back then I used the acronym to refer to something much more harmless: the often quickly-disappearing unofficial software patches on IBM's "testcase" ftp site. It seems that today I'll have to start using GIWYC to refer to the by-the-hour price changes on online sellers.

Amazon's communications honcho continued "If you've placed an item in your shopping cart for purchase at a later time, and the price for that item *declines*, you automatically get the new lower price for the item. If the price *increases* between the time you place the item in the cart, and the time you're ready to purchase, we notify you of the new higher price (which is the messaging you've seen). You can then determine whether or not you want to make the purchase at the new price, or remove the item from your shopping cart.". Nothing new about this, really, and I already thanked amazon.com for being upfront about the price increases instead of doing it silently without telling anybody.

Readers not as positive

Since I asked our readers for feedback and encouraged them to send me their opinions, a lot of messages were received, ranging from "Think about the tanking US dollar" to "it's dynamic discounts, so what?".

Others were more elaborate, and several of them were not happy at all and echoed my worries. A reader from Germany wrote, for instance: "The thing you described in your article regarding the Amazon price raises also happened to me two or three times during the last few months. I've never seen this before though, which made me kinda wonder... Nevertheless I accepted this practice, because I bought american books from Amazon.de (the german site) and I thought the raises may as well have resulted from a less fortunate Euro-Dollar conversion. Your experience of being warned only about higher prices and not having prices drop once in a while I can only agree with. I will keep an eye on the phenomena and in the meantime I will stick with cheaper Marketplace listings."

A reader named Brian from West Chester, PA also related his Close Encounter with Strange Price Hikes experience: "I'm from the US and the other day ordered a bunch of DVDs from amazon.co.uk. I have previously bought stuff from them (things I can't buy here in the US). Almost all the DVDs I was looking at (mostly not rated very well), were about 6GBP (with VAT). So, I added them all in my cart, and after it figured out that I didn't pay VAT, they were all less than 6GBP. Great. Bought them. Had to pay a lot for shipping. Today, I got my notice that the items shipped, and decided to click on the items to look at the prices again. Surprise, surprise! While I was charged what I was told, almost all of the videos went up to about 15 GBP. I captured all of these screen prints if you want. Well, needless to say with the state of the worthless US dollar, I never would have ordered these things at the prices I got tonight, but the big question is how/why did the prices change that much?".
Original Amazon.co.uk order, sent by our reader Brian

Our reader Brian's screen capture of Amazon.co.uk price hikes

Other comments included: "Now I know why Amazon doesn´t have a low price guarantee... :-) The price becomes something like a bait and the comfort of having a cart or a wish list to put items in for later purchase loses its appeal big time. I have to find and instantly buy, which very rarely do as I like to consider and evaluate my spendings". And reader Stephen from the U.S. commented: "I, like you, am an avid amazon customer. I purchase regularly from them. I keep a lot of things in my cart and wish list for future purchases. I have approximately 30 things in there. In the last month, every time I log in to my cart, I get the yellow box with price hikes. It seems as though all of the items I had in the cart has risen in price. Whatever the case may be, it's starting to shy me away from them. You're not alone!"

Perhaps the most interesting comment and theory to explain the price hikes came from a university student in the U.S. Anthony Sonstein wrote: "I am a student at Saint Louis University, and a Management Information Systems Major. Amazon.com's business practices is a common example used in my Accounting, economics, and statistics classes. This is a known practice for them, if you repeatedly look at or watch a certain item they assume you are willing to buy it for that price so then after a set amount of time they feel that you would be willing to pay a little more if you still want it. This is also true for web sites such as orbitz.com who have a parameter set in their database that increases the price of particular tickets if you look at it often or purchase tickets to the same place often (business travel) it recognizes this pattern and raises the prices.".

We'll be awaiting Amazon.com's response to this claim. µ