Customers Balk at Variable DVD Pricing

Amazon.com claims it was part of a test

Some customers were angry last week that Amazon.com Inc. was charging different prices for the same product in a practice the company defended as a periodic test it runs on the prices of certain items.

For example, a search for the Planet of the Apes DVD conducted at 2:40 p.m. one day last week with a Netscape browser turned up a quoted price of $64.99 - 35% off the original price of $99.98, according to the online retailer. But several seconds later, a search performed with Microsoft Corp.'s Internet Explorer browser resulted in a price of $74.99 for the same product.

Online shoppers were already discussing the practice in a DVD chat room, DVD Talk Forum, noting that Amazon's price for a limited-edition copy of the Men in Black DVD could differ depending on a number of factors. Those included which browser was being used, whether a consumer was a repeat or first-time customer and which Internet service provider address a customer was using, they said.

Amazon Defends Tests

Amazon spokeswoman Patty Smith said the company is testing the prices on select merchandise in its DVD store for a limited time, so different shoppers could indeed be charged different prices for the same product.

Smith declined to say how long these tests will last or what the criteria are for determining which customers will be charged more.

"Some customers will pay the same for a certain item as customers paid last week, some will pay more and some will pay less," she said.

If consumers think they've paid too much for an item, Smith noted, they have 30 days to request a refund from the Seattle-based company.

Smith said the price differences were the result of tests the company performs to re-evaluate various aspects of its Web site, such as the navigation system, overall site design and product pricing.

"We've learned that certain aspects of our site resonate with customers in different ways, and we are continually fine-tuning our site presentation to see how these variables affect customers' purchasing decisions," Smith said.

Amazon's explanation didn't seem to matter to some customers. David Sawyer, who lives in the Sacramento, Calif., area, said that although he has shopped at Amazon in the past, he won't do so again. "This kind of practice seems dishonest," he said. "I will not do business with people I do not feel are being honest with me."

Crisis of Confidence

Tom Williams, from Portland Ore., said he has never heard of anything as "grossly offensive" as different pricing for the same item. "[Amazon.com] is [eroding] my consumer confidence," Williams said. "I don't need to log on five or six times to get the best price."

However, Amazon.com frequent shopper Charley Cross in Folsom, Calif., said that although he will continue to shop at the site, he will probably pay closer attention to Amazon's pricing practices.

Janet Suleski, an analyst at AMR Research Inc. in Boston, said she isn't familiar with any other online retailer charging different prices for the same item, but she added that she wasn't surprised by it.

"[Maybe] they are testing prices to see how price affects the demand for a particular product," she said. "But I would say the explanation is more like different browsers are hitting different [price] files in different systems that are not synchronized [with the same pricing data]."

Some software does allow online retailers to tailor the price of an item to the buying habits of each customer. One such product is Retail Commerce Suite from BroadVision Inc. in Redwood City, Calif.

Copyright © 2000 IDG Communications, Inc.

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