Amazon just announced increased service fees for its Amazon Fresh program, making it less of a deal and perhaps even damaging the value and worth of the company’s grocery delivery program.
In an email sent out Friday, Amazon noted: “Starting Feb. 28, 2023, Amazon Fresh delivery orders under $150 will incur a service fee. Prime members will continue to receive free grocery delivery on orders more than $150. Delivery charges will be $3.95 for orders $100-$150, $6.95 for orders $50-$100, and $9.95 for orders under $50. This service fee will help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast and high-quality delivery experience.”
Prior to the change (at least in New York) the delivery fee was waived if you spent $50 and were a Prime member.
While Amazon suggests they’ll offer a reduced fee if customers allow a six-hour delivery window — good luck with that — these upgraded prices could actually make things worse. As Quartz notes, a lot of social media outrage over this price increase is coming from smaller/single households and low-income customers, all of whom rarely meet the $150 threshold. Additionally, the publication suggests customers may “save” by reducing or eliminating the voluntary tip on delivery, which would hurt Amazon workers.
And overall, it’s damaging to the idea that Amazon Prime offers great value. Whole Foods (owned by Amazon) already has a $10 delivery fee; meanwhile, the price for Prime was raised from $119 to $139 just last year. While the service certainly offers plenty of perks (free shipping, convenience, low generic prescription prices) and includes Prime Video, these added fees and price increases may wipe out any potential savings for customers.
This announcement comes at a rough time for Amazon, which has recently gone through layoffs and a dismantling of one of its charity programs. Upping the price on one of the company’s better Prime options is certainly not going to help them financially or in the eyes of customers.
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