Amazon Prime's price hike has been confirmed
as the Seattle-based e-commerce company announced Thursday that the service will now cost $99 per year, a $20 increase.
The price hike is the first increase since the online retailer introduced Amazon Prime in 2005. The service allows members two-day free shipping on many products, along with other perks.
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Amazon said earlier this year that executives were considering a $20 to $40 price hike in 2014.
The hike will reportedly apply to members who renew their memberships after April 17. If the membership is renewed prior to April 17, members will keep the $79 rate into 2015. Additionally, those who sign up for a trial period between now and March 20 are eligible for the $79 rate for the next year.
The company said it added a million new Prime members in the week before Christmas, which contributed to a surge in online ordering in the U.S. that resulted in widespread delivery delays
for people sending and receiving gifts at the end of the year, the AP reported.
There are two ongoing lawsuits against the online retailer that claim Amazon Prime encourages third-party sellers to inflate shipping prices to compensate for the free shipping, ABC News reported.
One of those lawsuits was filed by Alabama resident Marcia Burke, an Amazon Prime customer since 2010, who told ABC News, "for example, if the price of an item is advertised for $10 with $3.99 shipping and the [vendor] wishes to match or top their price, the [vendor] would charge $13.99 or higher."
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"By concealing the shipping charges in the price of the product," the suit reads, "Amazon is able to recoup the cost of shipping because it receives a percentage of the product's price," the Daily Mail noted
Burke is suing for breach of contract under the Washington Consumer Protection Act, which prohibits "unfair or deceptive" acts in trade and commerce, ABC News noted. Burke is seeking a refund from Amazon for all subscription fees to individuals who signed up for Amazon Prime between 2007 and 2011.
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