Prime Cost Rises, “Abusers” Losing Accounts

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After making noises for quite a while about a rate hike for Prime’s “Fast, FREE shipping” accounts, Amazon has raised the fee for Prime to $119/year ($59 for a student account). I just got the announcement today, which said the hike was effective on May 11th — 12 days ago. Maybe it was just a reminder to affiliates.

On the heels of that comes a news story on Techwalls about how Amazon is canceling accounts of Prime members who return “too much.” The article is pretty scary, using terms like “no way to appeal” and “without warning.” The comments section is fairly entertaining, too.

Maybe this is really a sea-change for Amazon. Comes a bit late for us. We were Amazon sellers for over 3 years, and did quite well until we lost some big money on some transactions that were definitely Amazon’s fault. Then, we noticed that the profits were steadily declining, with an ever-increasing percentage of “customers” who were “buying” stuff that they would use for a while (e.g., a really nice purse for some special event), then deliberately damage and return it. One or two occurrences might be legit, but after a while, the pattern got more and more obvious. Amazon’s way of handling that was to declare it was all our fault, and we’d be out the cost of the merchandise and the cost of the shipping both ways.

There were months that we lost money. We gave up on that about a year ago now. We had a significant amount of sunk costs in inventory, and we carefully managed to get rid of most of it at break-even, or maybe a slight profit. A lot of it we were unable to sell, and it wasn’t worth getting it shipped back, so Amazon got a bunch of it for nothing. I sometimes wonder if they planned it that way. (They claim they destroyed it, but I have no way to verify that. Sometimes I wonder where they get all that cheap merchandise they sell on Woot.)

I’m now kind of wondering if Amazon is actually cracking down on abusers, or just randomly canceling a few accounts that meet some threshold with the hope of scaring the rest into being afraid to make even legitimate returns.

Is Prime still worth it? We have had a Prime account for over a decade now, and it has been worth it to us. Then again, we rarely return stuff. We are generally careful to buy items that have good reviews — and we read the negative reviews, too. There are lots of other considerations, but that’s a subject for a different article.

At $119/yr, we still consider it a good deal. For now…