Amazon Lowers Prime Fee for People on Government Assistance

7 Jun, 2017 By: Erik Gruenwedel

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Seeking to address the nation’s population that receives food stamps and other government assistance, Amazon is offering its Prime membership for $5.99 monthly, compared with the $99 annual fee ($8.25 monthly) or separate $10.99-per-month option.

The program enables people with an electronic benefits transfer card to sign up for Prime, which includes Prime Video and Prime Music, in addition to free two-day shipping on myriad online purchases.

“We designed this membership option for customers receiving government assistance to make our everyday selection and savings more accessible,” Greg Greeley, VP of Amazon Prime, said in a statement.

In 2014, there were reportedly about 46 million people enrolled in the Supplemental Nutrition Assistance Program, formerly called food stamps. SNAP benefits in 2017 range from $194 a month for an individual to $649 for a family of four, according to the United States Department of Agriculture.

Amazon is banking on a pilot USDA program that enables SNAP recipients to purchase groceries online at Amazon, Walmart.com and other retailers.

“This is clearly aimed at Walmart customers,” Michael Pachter, analyst with Wedbush Securities in LA, told the . “Amazon is trying to present itself as a reasonable alternative.”

But how reasonable?

Walmart aggressively pursues people with EBT cards for in-store shopping — not online. Amazon, which has been launching AmazonFresh grocery delivery services, charges $14.99 monthly for the service — a significant challenge for people living in poverty.

“These consumers have always indexed lower in online transactions, and their living circumstances are often not well-suited to package delivery, and many of these consumers don't have vehicles to drive to a location pick up packages,” Sucharita Mulpuru-Kodali, an Internet consultant, told . “Of the long list of business that Amazon could target, this doesn't seem like the biggest one.”

Yet, the program could be a boon to Prime Video, considering Redbox, Netflix and Hulu only accept payment cards with Visa, MasterCard, Discover and American Express logos.

 

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