As Amazon competes with Walmart for low-income shoppers, the eCommerce retailer is rolling out discounted pricing of its Prime program to more people receiving government benefits. The company will now offer its Prime membership for $5.99 a month — down from $12.99 a month or $99 a year — to those on Medicaid for up to four years, The Wall Street Journalreported.
While more than half of U.S. households with internet have Prime, the program is popular with wealthier consumers. And even as shopping picks up online, many lower-income consumers still shop at traditional brick-and-mortar retail stores such as Dollar General, since they can pay with a SNAP (Supplemental Nutrition Assistance Program) card or cash.
By offering discounted pricing on its memberships, Amazon is also able to attract viewers to its digital content. “They come for shipping,” Aaron Perrine, who leads the program, told the WSJ. “They stay for digital.” Amazon, after all, offers streaming of music and videos.
Last year, Amazon announced a deal on Prime — $5.99 a month instead of $10.99 a month — to U.S. residents receiving government assistance. Shoppers with an Electronic Benefits Transfer card, which is used for benefits like the Women, Infants and Children Nutrition Program, are eligible for the lower price. These customers will then have to re-qualify every year for up to four years.
The offer came a little more than a year after Amazon introduced the $10.99 monthly payment option for Prime, which was previously only available for an annual fee of $99. Both options have the same perks, such as free two-day shipping on tens of millions of items and access to a large selection of online movies and TV shows for no extra charge.
In 2017, Amazon announced it would start accepting food stamps for its grocery items beginning in the summer. Amazon’s grocery service costs an additional monthly fee on top of the Prime membership.