Consumer Watchdog: Amazon is misleading customers with fake discounts

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SANTA MONICA, Calif. — Consumer Watchdog is petitioning the California attorney general to investigate Amazon, claiming the online retailer misleads customers by tricking them into thinking they’re getting a better deal than they really are.

On the Amazon website, many items show a price that has been crossed out, with a lower price listed next to it. The crossed-out price is often referred to as the list price or reference price.

A study claims Amazon is inflating the reference price to make customers think they’re getting a big discount.

“This reference price creates the impression that the consumer is getting a deal because the price paid is substantially lower the one with the line through it. The catch is that the product is actually widely available from many other outlets at prices much lower than the crossed-out reference price,” Consumer Watchdog said in a statement about the study.

Researchers looked at more than 4,000 products and found Amazon’s reference prices were higher than the prevailing market price as much as 75 percent of the time.

“In around 40 percent of cases, Amazon’s reference price was not charged by any rival in the marketplace,” the study states.

“In other words, the reference prices were an entirely bogus notional price that created the false impression that customers were getting a deal when they were not. When correcting the inflated list prices, the fictitious discounts often vanished,” Consumer Watchdog said in a statement about the study.

The study found Amazon’s reference prices overstated the median market prices by about 20 percent.

“A company cannot claim it’s discounting something from a certain price when virtually nobody charges that amount. It’s false advertising,” John M. Simpson, Consumer Watchdog’s privacy project director, wrote in a petition to California Attorney General Xavier Becerra.

“Amazon CEO Jeff Bezos is building the company’s business on lies and unfairly ripping consumers off,” Simpson stated.

The petition asks the attorney general’s office to “take immediate action to hold Amazon and its CEO Jeff Bezos accountable for this outrageous abuse.”

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