Amazon is upping the cost of a yearly Prime membership to $99 from $79, a 25 percent increase, and raising the Amazon Prime price for students to $49 from $39. Despite the higher prices, the benefits remain the same: free two-day shipping on "millions" of items, Prime Instant Video (Amazon's answer to Netflix), and access to the Kindle Owners' Lending Library. Still, a membership is worth the higher fee for many consumers -- and there are ways around the price hike if you act fast.
For starters, customers who sign up for a free 30-day trial by March 19 can secure the $79 rate for one year. Current memberships that expire before April 17 also carry the option of one more year at the $79 price. If your membership comes up for renewal after that date, however, your next bill will reflect the increase.
We've seen some creative suggestions for circumventing the hike, if only temporarily. A post on Slickdeals proposes that current members buy a gift membership at the current $79 rate and gift it to themselves when their current membership is up. That would yield at least one more year at the cheaper price.
ShopRunner, which provides free two-day shipping through partnerships with online retailers, is capitalizing on the Amazon Prime price increase by touting its own $79 annual rate and offering one year free for Amazon customers who elect not to renew their memberships. Some American Express card holders are already eligible for free membership and ShopRunner often dangles online coupon codes for complimentary enrollment. Members can also opt to pay a monthly $8.95 if they don't want to commit to an entire year. There is no streaming video or e-book library, though; Amazon sweetens the pot with more than 40,000 movies and TV episodes and more than half a million books to borrow. There's also no comparison when it comes to product selection. ShopRunner's stable of more than 85 affiliated stores includes American Eagle, Babies R Us, Drugstore.com, and Radio Shack but doesn't cover the number of market segments Amazon does.
Amazon Prime promises free two-day shipping on items ranging from laundry detergent to computers to furniture. Consumers can try out this Slate widget to get a sense of whether they order from Amazon often enough to recoup a $99 fee. The calculation is based on shipping alone and doesn't account for factors such as the convenience of two-day delivery, access to Amazon's content libraries, or the prospect of free shipping for non-Prime members on orders $35 and up. But assuming, as Slate does, that all non-Prime purchases ship for the minimum standard rate of $3.99, you'd have to place about two orders a month to make back the new membership charge.
If you use Amazon only on occasion, even a $79 yearly fee probably isn't worth it for you. We found that customers who use Amazon on a regular basis are the ones who find the membership more than worth it, at either price. Mickey Bullock of Grand Rapids, Mich., said he relies on the two-day shipping for almost all holidays because he lives far from his family. He uses the service to ship directly to the recipient without having to visit the store or the post office.
Cheapism recently analyzed Amazon prices, shipping included, and determined that the online giant is not necessarily cheaper than other retailers. Amazon was recently sued for allegedly inciting third-party sellers to build delivery costs into the final price they charge Prime members, making those customers feel like they are getting a deal on shipping when, in fact, they aren't.
Brian Lowery of Lagrange, Ohio, said he finds the Amazon Prime price worth it for the time he saves tracking down items offline. In the interviews we conducted and in comments posted online, Prime members emphasize speed and convenience over other perks or any perceived savings from shopping with Amazon Prime. Many seem to view the content libraries as no more than an added bonus and, at worst, an unwanted bundling of services. Access to e-books and streaming video makes a Kindle a more usable device but isn't a big selling point in and of itself. Melissa Zilonis from North Ridgeville, Ohio, said she signed up for the convenience of two-day shipping -- period.
Among the Prime members we talked to, there was resounding agreement that Amazon Prime is worth every penny, even at the higher price. After all, the increase amounts to less than $2 more per month. At the same time, though, dozens of disgruntled members have taken to an Amazon discussion forum to complain about the price hike.
One potential salvo for sticker shock: You can share a Prime membership with up to four other members of your household (however you choose to define it). Only the primary member has access to the video and e-book libraries, but for about $20 a month, each member could get more than a fair share of savings and convenience out of the deal.