Amazon offers discounts to customers on government assistance programs

Why it matters to you

Amazon is going after Walmart’s food stamp revenue with discounts for customers on government assistance programs.

Amazon Prime’s benefits run the gamut from the entertaining (on-demand shows via Prime Instant Video and streaming music) to the practical (Prime Fresh grocery deliveries), but none come cheap — subscriptions start at $99 per year or $11 per month. Those costs add up for folks on fixed incomes, which is why Amazon’s new incentive program offers a cut-rate Prime membership for customers on food stamps, welfare, and other government assistance programs.

Starting this month, Amazon Prime subscribers with a valid electronic benefit transfer (EBT) card — the electronic system that allows state welfare departments to issue payments to welfare recipients — can apply for cheaper subscriptions. They’ll only have to pay $6 per month, which equates to $72 per year — almost a 50-percent savings on the month-to-month plan.

Amazon has taken preemptive measures to curb potential abuse. Eligible subscribers will have to submit their EBT number when they sign up for Prime, and they cannot use it to pay for the Prime membership itself — it is only used to confirm their eligibility. And once customers enroll in the discounted Prime program, they have to re-validate their EBT card every 12 months for a maximum of four times, after which they will have to pay a normal subscription fee.

Amazon said customers on Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC) will be eligible.

The move marks a departure for Amazon Prime, which is most popular with upper-income households — the fastest-growing customers are those earning more than $112,000 in annual income. But Amazon has Walmart in its crosshairs. More than one in five customers on the Supplemental Nutrition Assistance Program (SNAP) shop at the brick-and-mortar giant, which has the second-biggest share of online sales. In 2014, Walmart made an estimated $13 billion on food-stamp purchases, or 4 percent of its total sales.

The new program is Amazon’s second to offer Prime discounts. The Seattle-based retailer’s Prime Student, which includes six free months of Prime benefits and offers 50 percent off Amazon Prime fees, is available to any college student with a valid .edu email address.

“We know when people try Prime they love it, because they save time and money with low prices on millions of items, unlimited access to premium videos and music, and fast, convenient delivery,” Amazon Prime vice president Greg Greeley, said in a press release. “We designed this membership option for customers receiving government assistance to make our everyday selection and savings more accessible, including the many conveniences and entertainment benefits of Prime.”