PriceBeam Blog | Pricing Strategy & Profit Maximization Insights

Amazon’s ‘was’-price Under Scrutiny: Bogus or Brilliant?

Written by PriceBeam | July 11, 2017

In an attempt to address legal issues that Amazon has had with its use of ‘list prices’ as benchmarks for discounts. It was found that these list prices were deceiving, and to ‘maintain customer trust’, Amazon started using historic price averages as benchmarks instead, which was later coined the ‘was’-price.
The ‘was’-price worked as intended; it did, indeed, restore customer trust. However, Consumer Watchdog recently reported that, in their investigation, only 12 of 44 of the sampled ‘was’-prices were equal to, or lower than the average price over the last 901 days.
Amazon denies this, saying:
We use a variety of systems to validate reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers”.


Now, as mentioned above, Amazon has previously been under scrutiny when they used list-prices only, and back then, they got caught red-handed and received a fine of $750,000. Now, however, their new reference prices are set using ‘a variety of systems’, something that is much harder for consumers to comprehend. It seems that what was intended as a move to restore consumer trust was, in fact, a move to decrease transparency.