District attorneys in Riverside and five other California counties have reached a settlement with Amazon over what they alleged were misleading or potentially misleading advertised savings on the online retailer’s website.
Amazon commonly uses reference prices – often called “Was” or “List” prices – to state that buyers are saving money. For example, a product advertised at $19.99 is adjacent to a reference price stated as “Was $29.99” or “List Price $29.99.”
A “Was” price is the price at which Amazon previously offered the product. “List” price advertisements suggest to consumers the price at which the product is commonly offered or sold by another seller, supplier or manufacturer.
The district attorneys determined that there were issues with how Amazon determined these reference prices and whether ‘Was’ or ‘List’ were used in a misleading manner, said the release, which did not explain those issues.
The judgment required Amazon to change its pricing disclosures. A link now takes the buyer to a new web page that explains the terms:
“The List Price is the suggested retail price of a product as provided by a manufacturer, supplier, or seller. Amazon will only display a List Price if the product was purchased by customers on Amazon or offered by other retailers at or above the List Price in the past 90 days except for books. List prices may not necessarily reflect the prevailing market price of a product,” Amazon’s website says.
“The Was Price is determined using the 30-day median price paid by customers for the product on Amazon. We exclude prices paid by customers for the product during a limited time deal. For Amazon Fresh offers, the Was Price is calculated as the median price offered locally for at least 28 days of the last 90 days,” the website says.
As part of the agreement reached in San Diego County Superior Court, Amazon will pay $2 million to the state’s Consumer Protection Trust Fund. Amazon cooperated, the release said.
The other involved counties were Santa Cruz, Alameda, Santa Clara, Yolo and San Diego.
Source: Orange County Register