Amazon Prime Lawsuit
Amazon Prime members have had some issues over the last two months. Shipping for Prime members was disrupted by the coronavirus pandemic in March and April, as Amazon focused most of its resources on delivery of groceries and pharmaceuticals. That was a necessity to get essential items to customers, who didn’t have many other sources available as stock was running out, many stores closed or had extremely long lines. But, customers who paid for an Amazon Prime membership weren’t getting the value they were promised.
A lawsuit has now been filed against Amazon by Jeremy Shepherd, a Prime member. The lawsuit claims that during that period, it caused delays for those shopping online for electronics and other “non-essential” items most often ordered via Amazon Prime shipping, according to the plaintiff. Basically, Prime members lost two months of benefits with no compensation which could be a value up up to $25.
An Amazon Prime membership is not cheap. The price is now up to $12.99 per month, or $119 annually. One of the main perks is that Amazon Prime members get free, expedited shipping of certain products that are immediately available from Amazon’s distribution centers. There are also many other extras.
Amazon Prime members spend an average of $538 a year shopping at Amazon, or 68% more than non-members, according to a survey by RBC Capital Markets. The lawsuit cites a 2020 poll that also shows that 68% of Prime members said they use their subscription to take advantage of fast and free Amazon Prime shipping, not for grocery or pharmacy delivery. That means the the disruption has affected a majority of Prime customers.
The plaintiff is claiming breach of contract, negligent misrepresentation and unjust enrichment, as well as violations of the New York Deceptive Acts and Practices Act. He is proposing certification of a New York Class and a national Class. The lawsuit seeks monetary damages, injunctive relief “requiring Amazon to stop selling Amazon Prime membership until corrective disclosures are made,” and other costs.
The lawsuit is still in the early stages, but keep an eye out for future developments if you have a Prime membership.