In 2016, Amazon phased out its “List” price and replaced it with “Was”. Based on this “was” price reference, Amazon then calculates a “You Save” percentage and dollar amount. At the time, the retailer’s use of “list” pricing was very controversial. In fact, Amazon Canada was hit wiith fines of more than $750,000 from that country’s Competition Bureau over misleading prices because it had confirm the accuracy of prices from its suppliers. So, in 2016 Amazon changed the way it referenced prices: goodbye “list”, hello “was. The company claimed that “was” was more accurate because it was the price actually paid by consumers rather than a “list” price which was simply a retailer or manufacturer’s full, undiscounted pipe-dream price. OK, we’re all for accurate, so was “was” better than list? Apparently not.
In fact, according to the report [PDF] commissioned by Consumer Watchdog, nearly 40% of the 4,000 Amazon products looked at used reference or list prices that are not charged by other retailers. The group urged the California Attorney General to further investigate and bring a legal action against Amazon. (no public action has been taken by the AG yet) If the allegation is true, then Amazon is engaging in an illegal pricing scheme; reference prices must legally reflect prevailing market prices. So what gives?
Amazon does not help us much because it has declined to specify how it comes up with list prices and the definition of prevailing market price could apply to the average, mean, or most common prices for the products on the market, the researcher examined each figure. It claims only that: ““We validate list prices against actual prices recently found across Amazon and other retailers…..we eliminate List Price when we believe it isn’t relevant to our customers.”
We pretty much confirmed what Consumer Watchdog’s report suggested: the Amazon “was” price was bogus. For example, we looked at the pricing for this knife:
So, this knife shows a price of $69.99 but is available on sale for $39.99, representing an alleged discount of 43% However, we went to TheTracktor.com, which is a fairly reputable price tracking site (you could also use camelcamelcamel.com). It’s one-year history of this item shows a consistent price of $29.99, not $69.99 or even $39.99.
We have long urged Amazon customers to disregard the “list” price and we now suggest ignoring “was” the price reference as well. This is but one example of how Amazon’s “was” price and it’s “you save” discount are misleading, or worse. So when we shop Amazon, we compare prices with other online retailers by using Google’s Shopping search or, alternatively, other online retailers’ own sites. Often times, Amazon’s price will be highly competitive, although not the cheapest. Last Prime Day, for instance, buying guide site The Wirecutter scanned nearly 8,000 advertised deals and found only 64 to be worth buying. (Dedicated curation sites like that or Slickdeals are another good resource during an event like Prime Day.)
Another essential part of analyzing an Amazon deal is checking to see whether the reviews are legitimate. In order to figure out whether Amazon is offering a decent value, you must determine how genuine the reviews are. The solution: paste a link to Fakespot, ReviewMeta, or any other review analyzer site. Fakespot, for instance, says it primarily judges a review’s authenticity on “the language utilized by the reviewer, the profile of the reviewer, correlation with other reviewers’ data, and a machine learning algorithm that focuses on improving itself by detecting fraudulent reviews”
If you don’t check pricing accuracy and history as well as the integrity of the reviews, there’s really no way to verify the accuracy of Amazon’s pricing claims. It may seem like a lot of work, but it literally takes a minute; a minute that save you money and hassle.