Outrage Prompts Amazon to Change Price-Testing Policy

Retailer will also refund some customers

In the wake of customer outrage at both a recent pricing glitch and a price-testing policy, Amazon.com Inc. last week said it would alter its price-testing policy and give partial refunds to consumers who paid higher prices than others for similar items.

Over the past two weeks, the company has received negative feedback from customers on two fronts. First, some consumers said they were unhappy with Amazon.com's price-test policy that offered different prices for the same DVD to different customers.

In a separate incident, customers said they were angry when Amazon wouldn't honor lower prices they had been quoted on some DVDs. Amazon blamed a Sept. 7 computer glitch and said it wasn't obligated to sell the items at the incorrect prices.

When the online retailer discovered the glitch, it e-mailed customers who had purchased DVDs at the incorrect prices and asked if they still wanted to purchase the items at their correct but higher prices. This was done in accordance with Amazon's pricing policy, said Amazon spokesman Bill Curry.

That decision apparently upset customers, several of whom have been venting their anger in the chat room of DVD Talk (http://talk.dvdtalk.com), a Web site dedicated to DVDs.

Dan Bither of Wilmington, Del., said he would file a complaint with his state's attorney general if Amazon didn't honor the $16.99 price he was originally quoted for a DVD boxed set. He said Amazon e-mailed him, quoting a price that was 470% higher - $79.99 - than what he was originally quoted.

In an e-mail Bither received from an Amazon.com customer service representative that he forwarded to Computerworld, the company blamed the incorrect price on price testing, not a computer glitch.

In the event Amazon conducts price tests in the future, said Curry, it will automatically charge every customer the lower price and has now taken steps to refund the difference in price to customers who paid the higher test price.

Barrett Ladd, an analyst at Gomez Advisors Inc. in Lincoln, Mass., said Amazon's decision to change its policy reflected its consumer focus.

But, Ladd added, the fact that Amazon.com didn't realize the impact before could mean that "maybe [Amazon] didn't think anyone would find out about the [price tests]."

Copyright © 2000 IDG Communications, Inc.

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