Amazon Prime’s one-day delivery claim misled consumers, advertising body says

An Amazon Prime package
Andrew Harrer | Bloomberg | Contributor

The U.K.'s advertising body has ruled that Amazon cannot make some claims about next-day delivery for its Prime service after 280 people complained they didn't receive items the day after ordering.

The Advertising Standards Authority (ASA) said that Amazon.co.uk's claim of "one-day delivery" was misleading for some Prime-labeled items and it must make clear that these are not available to be delivered the following day.

The ASA's ruling, seen by CNBC, stated that a "significant proportion of Prime-labeled items were not available for delivery the next day," in relation to claims on Amazon's U.K. website made in December 2017.

At the time, Amazon's U.K. homepage included the message "one-day delivery for Christmas," with further text stating, "get unlimited one-day delivery with Amazon Prime." Text elsewhere on the site explained that this was dependent on whether items were in stock and the time the order was placed.

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In its response to the ASA, Amazon stated its text did not promise a particular speed of delivery of a particular product, and that Prime delivery information was available on separate web pages.

However, the ad body concluded that people were unlikely to visit those pages before deciding to buy Amazon Prime, which costs £7.99 ($10.18) a month, or £79 a year, for U.K. customers.

"Because consumers were likely to understand that, so long as they did not order too late, all Prime items would be available for delivery the next day with the one-day delivery option… we concluded that the ad was misleading," the ASA report stated.

The ad body has told Amazon that its claims must not appear again in their current form, which is its usual phrasing when it has upheld complaints.

Delivery is a huge concern for Amazon, which noted the risk associated with relying on external partners in its latest annual report, and its possible impact on financial results.

"If we are unable to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience," its 10-K filing stated in February. Amazon spent $21.7 billion on shipping, delivery center and transportation costs in 2017, up from $11.5 billion in 2015, and announced in June that it will let entrepreneurs run local delivery networks in the U.S.

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Exactly what Amazon has changed as a result of the ASA's ruling is not clear, but a spokesperson for the online retailer said in an emailed statement: "The expected delivery date is shown before an order is placed and throughout the shopping journey and we work relentlessly to meet this date. The overwhelming majority of one-day delivery orders are delivered when promised. A small proportion of orders missed the delivery promise last year during a period of extreme weather that impacted all carriers across the U.K., and we provided support to impacted customers at the time."

The U.K. Prime service includes next-day delivery on some items as well as access to video, music and digital books. Amazon's website currently claims Prime offers "unlimited, fast one-day delivery on millions of items."

The Prime model operates differently according to where customers are in the world. In the U.S., it delivers in "two days or faster" from the time of shipping, and costs $12.99 a month, or $119 a year. In India, a Prime subscription costs 129 Indian rupees a month ($1.85), or 999 rupees a year, and includes next day or two-day delivery, or standard delivery on eligible items. The site lists 79 cities it can deliver to in one day.

  • CNBC's Courtney Reagan contributed to this report