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Amazon Prime Day ‘discounts’ may actually be price increases, study warns | Fortune

Amazon Prime Day sale could be used to ‘mislead’ shoppers into paying higher prices, study warns

A pile of Amazon packages is seen on a busy sidewalk in New York.
Prime Day returned on Tuesday and will run until Wednesday, Oct. 12.
Michael Nagle/Bloomberg via Getty Images

Amazon’s Prime Day event is back—but as the company promises its subscribers huge savings, a new study is warning shoppers to be vigilant to avoid being duped into paying higher prices during the sale.

The e-commerce giant’s flagship promotion returned on Tuesday and will run until Wed., Oct. 12. It marks the first time Amazon is holding its Prime shopping event—the annual sale exclusively for its Prime subscribers—twice in one year, with the October sale coming after a two-day Prime sale in July.

However, in a study published last week, researchers from Arizona State University, the University of South Carolina, and the University of Florida warned consumers that some of the discounts on offer could actually be price hikes masquerading as competitive deals.

Analyzing the prices of 15,000 products listed on Amazon between 2016 and 2017, the team found that this strategy was “a prevalent phenomenon” on the site.

They said sellers often framed short-term price increases as discounts by posting an elevated list price alongside a phony discount claim, allowing them to actually hike the cost of the product under the guise of offering a big saving.

In many cases, they said, list prices—which help consumers compare the supposed regular price of the product with the promotional price—were introduced with a price increase before being removed days later alongside a price drop.

“In these cases, if a consumer makes a purchase in the presence of a list price (and a claim of a discount), the consumer effectively pays a price premium,” the research team said in the paper. “Such a pricing practice is deceptive from the consumer’s perspective because sellers who use it are framing a price increase as a discount.”

According to the researchers’ data analysis, more than one in five list price introductions were accompanied by price increases, and 75% of price hikes introduced in this way were reversed within days.

“As a result, consumers pay a higher price in the presence of a discount claim than in its absence (about 23% higher than before the discount claim is posted and 12% higher than after the discount claim is removed),” the study’s authors said.

List prices like these were displayed for an average of 17.4 days, according to the study.

In one example, the researchers pointed to a vacuum cleaner that was being sold with a claim that there was 24% off of its original price, when in fact its price rose by 65%.

Arguing the strategy was being used by Amazon sellers to “mislead consumers,” the research team warned it was being employed across various product categories.

A spokesperson for Amazon told Fortune on Tuesday that the company’s product pages provide “clear and accurate pricing information.”

“This study was conducted more than five years ago, and doesn’t accurately represent the shopping experience today,” they said. “We continually work to help customers make more informed purchase decisions, and have since evolved how we describe pricing information.”

The research team behind last week’s study aren’t the first to question the legitimacy of some of the deals to be found during Amazon’s Prime Day sales.

Experts have long warned that the event hosts fake deals, promotes poor-quality goods and even pushes “super sneaky scams,” with consumers urged to use price comparison tools to ensure they’re getting a good deal.

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