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Amazon Prime debuts discount for anyone on government benefits

Posted at 5:28 PM, Jun 06, 2017

Amazon is now offering a discount on Prime memberships for anyone on government assistance.

Customers normally pay $10.99 per month or $99 per year for Prime subscriptions, which offers free two-day shipping on many products as well as access to streaming video and music services.

Now anyone with a state-issued debit card for government benefits can get Prime for $5.99 a month.

The aim is to make "savings more accessible" to everyone, according to spokeswoman Julie Law. She adds that delivery could make life easier for customers who may not have reliable access to transportation, and that Prime gives members discounts on essentials like diapers.

Amazon already has a well-heeled customer base, according to analysts. With this program, it hopes to pull in more low-income shoppers.

"It makes it so there's no component of the U.S. market that can't be an Amazon customer," said Mike Olson, an analyst with Piper Jaffray.

It's unlikely to cause a big spike in sales, said Michael Pachter, an analyst at Wedbush Securities. But it sends a message that Amazon is for everyone.

About 18% of U.S. households receive government assistance for food, according to the most recently available government data.

The move also takes aim at Walmart, which has been gaining ground in the online shopping space since it bought online retailer for $3.3 billion last year. In the first quarter of 2017, Walmart's U.S. online sales were up 63%.

But Amazon, a $484 billion company, does not intend to give up its crown.

It's growing by doing everything from expanding its cloud computing business to testing drone delivery. It's even opening physical stores. Last week, Amazon's stock hit the $1,000 milestone.

To receive the discounted Amazon Prime membership, buyers will need to have an Electronic Benefits Transfer card. They'll have to re-register every 12 months, and can do so a total of four times.

The company declined to say how it settled on the $5.99 monthly fee.

Amazon is also participating in a U.S. Department of Agriculture program to test using food stamps with online retailers. But the new Prime membership discount does not apply to AmazonFresh, the website's grocery delivery service. That service still costs all Prime users an additional $14.99 per month.