On Wednesday, Amazon announced a plan to slash the Prime membership for low-income Americans. Under the new plan, Medicaid recipients will be able to gain access to the company’s Prime services for $5.99 per month. The usual monthly rate stands at $12.99.
This means that the company’s lower-income customers will have a 54% discount from the normal Prime membership fee per year ($99). When they apply for the discount, users will have to own an Electronic Benefits Transfer (EBT) card or a Medicaid card.
Medicaid recipients will be able to access Amazon Prime at the discounted price for four years. It is also worth noting that these users can cancel their subscriptions at any time.
Medicaid covers millions of low-income Americans. Last year, there were over 74 million Medicaid and CHIP enrollees, which account for 20 percent of the population.
Amazon, Other Retailer Courting Lower-Income Americans
In 2017, the e-commerce giant offered lower Prime fees to Americans on the and Women, Infants, and Children Nutrition Program (WIC) and Supplemental Nutrition Assistance Program (SNAP) programs. Those users could access Amazon’s offer if they had an active EBT card.
Amazon’s latest decision is likely an attempt to attract more customers, regardless of their incomes. More and more retailers offer hard-to-resist perks in their fight for wallet-share. For instance, Walmart will deliver your package in two days free of charge if you order the products online and the total cost exceeds $35.
Consumer Intelligence Research Partners recently found that Amazon’s Prime membership has a boosting effect on the sales in the U.S. For example, an average Prime member spends around $1,300 annually. By contrast a non-member spends just $700 on the site. In the United States, Amazon currently has 85 million Prime members.
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