Amazon’s Dying Smile Donation Program… Was Really All About Amazon Keeping Referral Fees To Google Down
from the hidden-incentives dept
You may have heard last week that Amazon has announced the end of its “AmazonSmile” program, in which you could shop at Amazon, and a portion of all of the money you paid would actually go to the charity of your choice. Amazon claimed that the program “has not grown to create the impact we had originally hoped” and (perhaps reasonably!) implied that the overhead of delivering small amounts to many different charities was not very efficient. The company noted that the “average” donation to charities was less than $230 per charity.
Of course, a simpler solution if that were really the problem would be to keep the program running, but limit the number of charities to which the money could be directed. That would likely annoy some of the smaller charities who had benefited, but still.
Some people, naturally, assumed that Amazon was doing this to claw back some of the money that it had previously been sending to the various non-profits. But, it appears the actual story here may be even more crazy.
Soon after the news broke, there was a fascinating post on Reddit from someone claiming they used to work at Amazon corporate and was around when the Smile program was launched, and claimed that the program was never designed to be as generous as it was presented. It was really just designed to fuck over Google and have to pay that company less in referral fees.
Here’s the most messed up part. I used to work at Amazon corporate, let me tell you how the entire program Amazon Smile got created.
So basically, when a customer wants to buy a product, they usually go straight to Amazon.com and enter what they’re looking for. But there’s also a large segment of customers who begin their search on google, and ends up at Amazon. Well guess what. When that type of search to purchase experience happens, Amazon has to pay google. Internally, Amazon thought that if they could force users to go straight to Amazon, offer a small but obviously less amount of money to charity from each customer than would have been paid to google, it would help kill customers going to google, save Amazon more money than paying google, and be good overall for the brand value of Amazon.
That’s why for the program to work, the user has to start shopping at smile.amazon.com. Until recently, the option to use amazon smile wasn’t even available in the app, and even then the user still had to ‘renew’ being a part of Smile multiple times a year. There is no way for a customer to go through the traditional shopping experience, and then during checkout decide they want to give a portion of their purchase to charity, because giving to charity isn’t the point of the overall program. Amazon Smile was developed by the Traffic Optimization team, whose entire purpose is increasing efficiency and lowering costs of getting customers to Amazon. A team of Amazon employees whose sole purpose is doing good in the world doesn’t exist, despite employees repeatedly asking for such a team to be built in pretty much every single all-hands meeting.
Literally everything the company does is about profits, and extended customer lifetime value. Everything. Even the charity programs are just designed to save Amazon money.
While there’s no way to prove that this person really did work there, it does sound accurate, and another commenter backed this up, with credible additional info:
I also used to work at Amazon, and was a founding member of the AmazonSmile program, part of the Charity Support team working with the nonprofits to help them actually receive the funds. This was 2013. Left in 2016 after fully fleshing out the program, developed the metrics reporting system for tracking charity issues, and even a blurb document to respond to the most common questions nonprofits had.
You are completely correct. The intent of the program was to be cost neutral – the amount Amazon donated to charities was about equal to the costs it saved by not having to pay Google for advertising clicks. Tax writeoff was a negligible side benefit, goodwill was just marketing fodder.
Later on that same commenter notes that another “side benefit” to doing this was to push back on some local news stories that had slammed Bezos for not being involved in enough charitable works. So this kinda killed multiple birds with a single “look at how good we’re being” stone.
From all that, I’m wondering if Amazon is now realizing that the overhead of handling this program just wasn’t worth it any more, and the fact that they made it so difficult to use didn’t really stop that many people from Google, so if they have to just write a slightly larger check to Google that’s easier than having a team figuring out how to send hundred dollar checks to charities.