- Amazon offers discounts on Amazon Prime fees to recipients of EBT funds and, now, Medicaid.
- This is part of Amazon‘s play to go after lower-income customers.
- That has traditionally been the stronghold of rival Walmart, which is still the largest retailer in the US by a wide margin.
Amazon Prime costs $US12.99 a month, but not everyone has to pay that much for it.
Amazon has been offering discounts for holders of EBT cards since June. EBT stands for Electronic Benefit Transfer, and these debit cards are the primary way that recipients of SNAP – otherwise known as food stamps – get their benefits. Amazon has now started offering the discount to Medicaid recipients as well.
The discount is substantial: Amazon asks these lower-income customers to pay $US6 a month.
The cheapest option for a typical Amazon Prime member is to pay $US100 a year to renew their membership on an annual basis. That translates to about $US8 a month.
All recipients of either EBT or Medicaid benefits need to do is show their card and verify their status with Amazon by taking a picture. They can then sign up for Prime as usual.
Prime gives customers free two-day shipping and other perks like free video streaming and access to the Prime Now two-hour delivery service.
This expansion of discounted Prime membership is a direct assault on rival Walmart’s traditional stronghold.
Most of these potential customers are younger or have a lower income than Amazon’s traditionally well-heeled Prime members. But they spend money, too, and as Amazon dives more heavily into its fresh grocery and essentials business, the convenience may drive them there instead.
The low-income customer segment has long been Walmart’s forte, and the retailer has its own products geared toward them, like low-fee checking accounts and money services that can be done in-store.
In 2016, Walmart generated $US13 billion in sales from customers using SNAP benefits. Amazon is also testing a pilot program with the USDA to offer SNAP benefits to online shoppers.
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