Amazon's old customers 'pay more'

Some Amazon customers are refusing to accept some DVD prices

By BBC News Online internet reporter Mark Ward

Regular Amazon customers could find that the reward for their loyalty is higher prices.

New visitors to Amazon.com seem to be getting bigger discounts than those that shop often at the online store.

Regulars posing as first-time visitors, have been able to get bigger discounts on popular DVDs than on previous attempts.

But Amazon says the different discounts are due to a price testing scheme that went awry, and are not evidence of discrimination.

I hope there is an innocent explanation for this

Jonathan Whipp, Amazon customer

The news that Amazon is charging different prices for the same products came out of a discussion group on the DVD Talk Forum website.

Regular participants in the group swapping prices and tips found that by making small changes to their computers they could make significant changes to the discounts they received on popular DVDs.

Participants to the forum found they could get different prices for more than half of the top selling DVDs on the Amazon.com website.

DVDs affected included Mission Impossible 2, the Limited edition of Men In Black and a collected set of the Planet of the Apes series of films.

The changes made as much as £10 ($15) difference to the price they were offered.

Cookies cut prices

The key to the discounts seemed to be small files called cookies that many websites place on the computer of anyone visiting their site.

The cookies record who that person is and what they have been doing.

By deleting the cookies that Amazon had left on their computer, or using a browser that did not accept cookies, some customers found they were getting much bigger discounts.

The implication was that Amazon was offering bigger discounts to first time visitors to tempt them back. Using a different browser also seemed to make a difference to the discounts.

Those using Microsoft's Internet Explorer seemed to pay a little more than those using Netscape's browser.

"This is a bad idea," said one participant in the discussion forums. Others branded it "sneaky" and "unethical".

"People keep getting different prices every time they visit the site," regular Amazon DVD buyer Jonathan Whipp told News Online, "It doesn't make sense that people checking at the same time are getting different prices, and a lot of prices seem to be yo-yoing."

He added: "I hope there is an innocent explanation for this."

Playing with prices

In its defence Amazon said that the prices people are offered had less to do with past purchasing decisions of customers and more to do with testing of customer behaviour.

Amazon said the prices that customers saw were assigned randomly and were not tied to cookies or past purchases.

A spokeswoman for Amazon said it was testing what happens to buying behaviour when prices go up or down. The company was seeing how much of a discount was needed to make a significant difference to the number of DVDs it sells.

"It's a quite standard procedure in retailing," said the spokeswoman.

She added that the price testing was just one of the many small changes Amazon makes to its site on a regular basis to test customer reactions.

The company regularly tests its search system, what the home page looks like, overall site design as well as product pricing.

The spokesman added that there are no plans to do similar testing with the Amazon.co.uk website. She urged anyone who feels they have paid too much to contact Amazon customer service.

This is not the first time that Amazon has been criticised for its pricing policy. A few months ago it tried the same thing with an MP3 player, sparking outrage among the customers who ended up paying more.

As the internet and profiling technologies become more common, many expect that buying histories will make a difference to the price you pay for goods and services.