On Tuesday, Amazon launched a new perk for Prime members that will give them cash back on purchases. Through Amazon Prime Reload, Prime members can get 2 percent back on purchases if they add funds to their Amazon balance using a debit card attached to a bank account. Amazon Prime Reload is built on top of the gift card infrastructure that’s already in place. A Prime member's 2 percent rewards will be added to their gift card Balance every time they reload, instead of being calculated on a per transaction basis.
Total Retail’s Take: Amazon Prime Reload gives the retailer many advantages:
- it may encourage people to load large lump sums of cash onto their Amazon balance;
- it may prompt users to make impromptu purchases since there's cash already available in their account; and
- it could attract low-income shoppers.
Amazon has made a push for low-income families, historically a strong demographic for Wal-Mart, with the launch of Amazon Cash, a way to shop without a bank card, as well as a discounted Prime membership for those on government assistance. Amazon Prime Reload seems to have the same feel as a gift card balance, and I know I'm more likely to shop when I know I have money already allocated to the brand.