Happy New Year! Time to Cancel Amazon Prime?
We of course mean that now that holiday shopping has concluded, some Amazon.com customers may decide they don’t need or want their Amazon Prime membership. Amazon makes it relatively easy to cancel, since a customer can re-start a membership at any time. And the monthly payment option means that decision can be temporary and timed to match customer shopping patterns.
In fairness, relatively few Amazon Prime members do cancel a membership in a given quarter or year. In our sample of recent Amazon customers, we miss some, notably those that cancelled their Prime membership and truly stopped shopping at Amazon - as well as non-Prime members who stopped shopping at Amazon.com. In our dataset, 2% of US Prime member Amazon shoppers cancelled their membership in the twelve months ending September 2024.
We wondered, though, among those customers who dropped their Prime membership, why did they. Conventional wisdom suggests customers sign up for a monthly membership before the holiday shopping season begins, take advantage of Amazon’s generous shipping benefits, and cancel in January. In our quarterly Amazon survey, CIRP asks subjects who are not current Prime members, but had a membership in the past, why they canceled their Prime membership.
The reasons have surprisingly little to do with holiday shopping. Sure, a very small number do mention that they joined Prime only for the holidays (“I just wanted the free trial to use for Christmas shopping last year” is a typical answer) only to cancel it afterward. Almost half of former members cancel because they cannot or do not want to pay the significant membership fee (Chart 1). A full year paid annually now costs $140, while paying monthly for a full year costs almost $180.