Is Amazon Turning Shoppers Into Paid Spies?

It wasn't long ago that if you walked around a store writing down prices with a pad and pencil, you would quickly be shown the door. Today, retailers look on in horror as customers stroll the aisles with their smartphones, scanning barcodes.

Stores are being turned into showrooms where consumers go to look at items that they then purchase online, a trend that has contributed to the demise of Circuit City and other big electronics retailers.

The customers think they're being smart shoppers, and maybe they are.  After all, what's wrong with comparing prices between stores and online merchants?  Theoretically nothing, except that it's a trend that local merchants say could be the death of them.  The harm done to communities by the loss of local businesses would far outweigh any savings consumers might realize, retailers say. 

In a particularly bold -- some would say outrageous -- maneuver, Amazon is offering consumers up to $5 off on their purchases of electronics and other high-end items if they compare prices using Amazon's mobile app while strolling through a store.

The promotion starts Saturday and Amazon says it's intended to encourage consumers to use its bar-code app.  Oh, and also, Amazon will hang onto the information so it knows who's charging how much for that electric toothbrush you were looking at.

This, says Rick of Hillsborough, N.J., "pulls back the shroud and shows [Amazon's] true evil intentions."

"Amazon is PAYING customers NOT to buy locally and to buy from Amazon," said Rick, who runs a local toy store. "The rather sinister plan is targeted at small, local businesses in one of the most important sales day before Christmas.  This day can make or break the profitability for a business for the entire year.  Amazon knows this.  Amazon, by paying people NOT to shop at local stores will put many local stores out of business."

Consumer empowerment

Amazon says it's consumer empowerment.  

"We scour online and in-store advertisements from other retailers, every day, year-round,” said Sam Hall, director of Amazon Mobile, quoted by AllThingsD. “Now, we are enabling customers to use the Price Check app to share in-store prices while they search for the best deals.”

Amazon already competes unfairly by doing everything it can to avoid paying local sales taxes, retail merchants complain.  By paying consumers to be its spies, it goes too far, in Rick's opinion.

"They could do many promotions to enhance sales...but they chose to do one designed to pull people away from shopping locally.  This is no accident.  The big chains can handle it.  The small stores will close," Rick told ConsumerAffairs.com.

Independent bookstore owner David Didriksen, who runs Willow Books in Acton, Mass., says the Amazon promotion is "outrageous."

“It’s really just another in a long series of predatory practices by Amazon,’’ said Didriksen, who has in the past spoken on behalf of the Massachusetts Association of Retailers urging state legislators to end Amazon’s ability to avoid collecting state sales taxes on products it sells to Massachusetts residents.