Published: Thu, March 08, 2018
Economy | By

Amazon offers Prime memberships for Medicaid recipients for $5.99; 54% discount

Amazon offers Prime memberships for Medicaid recipients for $5.99; 54% discount

The online retailer opened its discounted $5.99-a-month Prime membership on Wednesday to people on Medicaid, giving it an even bigger pool of potential shoppers who may otherwise have been unable to pay the standard fee. This follows a previous outreach effort aimed at those with cards used in other public assistance programs.

To qualify for the discount, customers must provide a valid Electronic Benefits Transfer (EBT) card or Medicaid card.

Amazon has taken another step to woo low-income shoppers to its site and away from rival Walmart. Data show that low-income customers tend to go to the latter, while middle- and upper-income customers lean toward Amazon. The lowered monthly rate is $27 cheaper than the $99 annual Prime membership fee.

Amazon Prime costs $12.99 a month, but not everyone has to pay that much for it. As of 2016, roughly 44 million people got benefits from SNAP, the program formerly known as "food stamps".

The move could also help Amazon siphon customers from Walmart, a major competitor that's focused for years on providing services for lower-income customers. Eligible shoppers need to reapply once a year and are eligible for up to four years. And yes, an Amazon Prime subscription brings with the possibility of saving money in other ways: In addition to lower prices and free shipping often available at Amazon, Prime members could theoretically cut their spending by canceling Netflix, Spotify, or other streaming services and using Amazon's free options instead. But customers won't be able to share their Prime membership with a second adult, as with a regularly priced Prime membership. But it's not altruism; Amazon Prime has been widely adopted by middle-class and well-off Americans, so if the membership program is going to continue to grow in the US, the company has to figure out how to attract other demographics. Her youngest son has a rare genetic disorder that prevents her from working full time and makes going to the store more hard.

"I think customers that have tried this plan have seen enormous value from it", he added.

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