Sunday, January 27, 2019

Amazon Prime is difficult to cancel: here's why - Business Insider

It seems Amazon makes it intentionally hard to end a membership. Customers may assume they have already canceled after they click "end my membership." This is much like the cart abandonment phenomenon, where customers add things to their online shopping cart and neglect to check out.

Of course, Amazon's customer service will refund any unexpected charges, prorated from the last time they were accessed. So, customers aren't on the hook for membership fees they don't want to pay.

But many customers may just throw up their hands and accept that they paid for a membership for the next month or year.

It's no surprise that Amazon would make it as difficult as possible to quit Prime. The membership is Amazon's crown jewel, and the customers are far more valuable than the typical Amazon shopper.

Read more: Amazon is making it harder and harder to quit Prime

While Prime members buy an average of $1,400 in products from Amazon each year, regular, non-Prime customers only spend $600, according to a Consumer Intelligence Research Partners survey from 2018.

Using their unlimited free shipping, Prime members tend to order more items, more often.

Amazon needs to keep these customers both satisfied and confident they are getting a great value so that they stay members.

While many might associate Prime solely with its two-day-shipping guarantee, it also has other benefits like video and music streaming. There are also some items that are available only to Prime members, which creates additional value.

Last May, Prime members were given another perk: big discounts at Whole Foods, which rolled out to stores in 2018.

The value of Prime has also risen steadily as Amazon has added more benefits to the program over the years. A recent JP Morgan analysis estimated that the service is actually worth $785 a year when everything it offers is counted together. That's six and a half times the actual cost of an annual Prime subscription.

It's also an increase of about 12% from what JP Morgan estimated Prime to be worth in 2017, when its analysts said membership was worth $700 a year.

Are you an Amazon employee or customer with a story to share? Contact this reporter at dgreen@businessinsider.com.



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