Amazon offers special Prime rate for millions of Medicaid recipients
Amazon.com wants to make sure anyone who wants to shop online can do so. The e-tail giant has taken its latest step in democratizing retail by offering a substantial discount on monthly Prime memberships to Americans who are Medicaid recipients.
Yesterday, Amazon lowered its $12.99 charge for Prime members on its monthly subscription program to $5.99 for the tens of millions of people in the U.S. who are on Medicaid. Last year, Amazon made a similar move in reducing its monthly subscription program to $5.99 for Prime members enrolled in governmental assistance programs such as WIC (Nutrition Program for Women, Infants and Children) where funds are distributed to participants using electronic benefit transfer cards.
Amazon says people interested in the Prime discount will need to upload images of their Medicaid or EBT cards on an annual basis. The e-tailer is capping the monthly discount for Prime members on government assistance at four years.
Amazon has used its Prime memberships, which offer free two-day shipping and access to other perks, to generate more frequent purchases on the site.
Prime memberships in the U.S. have grown to 90 million, according to Consumer Intelligence Research Partners (CIRP). Sixty-three percent of all those shopping on Amazon belong to the program. Prime members spend an average of $1,300 a year with Amazon, nearly double the average $700 the site generates from a non-member.
Amazon’s outreach to Medicaid recipients and others in programs intended to act as a social safety net could make the site more affordable to millions of consumers who wouldn’t normally be expected to shop. The average Prime member makes $83,000 a year, according to a Seattle Times report, which named Morgan Stanley as its source.
- Amazon offers Medicaid recipients discounted Prime memberships – The Seattle Times
- Amazon offers Prime discount to some people receiving government assistance – The Seattle Times
- Amazon’s Prime membership grows to 90 million in U.S. – RetailWire
- Amazon, Hy-Vee and Safeway among retailers in USDA online food stamp test – RetailWire
DISCUSSION QUESTIONS: How successful do you expect Amazon to be in attracting people on government aid to become monthly Prime members? What will the initiative mean for Amazon and its competitors? How might it affect the consumers who become Prime members as a result?