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Amazon faces a surprisingly strong backlash against Prime price hikes

Published Mar 18th, 2014 2:32PM EDT
Amazon Prime Price Increase

Amazon is about to raise the price of its Prime subscription service from $79 to $99 per year, and although the increase is likely worth it, Amazon has been trying to prepare its customers for the price hike for the past couple months. In January, Amazon hinted that it may increase the Prime subscription price to as high as $119 per year. With the final price settling at $99 per year, Amazon was hoping its customers who love Amazon Prime would be more amenable to the price increase. It turns out this has not worked out so well.

According to a survey by Brand Keys picked up by CNBC, Amazon’s customer loyalty and brand engagement rating dropped from 93% to 83% two days after Amazon announced the price hike.

“Based on immediate Prime member reactions, they may have underestimated the negative effects of the increase,” said Brand Keys president Robert Passikoff. “Consumer expectations are always on the increase, and when it comes to online retail, they operate in a ‘what-have-you-done-for-me-recently?’ paradigm. Price increases weren’t what Prime Members were expecting.”

The backlash against the price hike is also apparent in Amazon’s own help forums, as noted by Geek Wire.

One commenter noted, “Time will tell if this was a brilliant or bonehead move on Amazon’s part, but for us, the scales do not tip in this family’s favor. We will not be renewing.”

Another complained that Prime doesn’t live up to its promises, saying “The Prime movies are horrible and there is NO guarantee to their 2-day delivery which I might get 50% of the time. Just don’t see renewing it as a result. Not for $99.”

If you’re not sure whether Prime’s new price is worth it for you, check out Slate’s handy widget, which estimates potential savings with Prime based on your previous purchases.