Steve was going to split the cost of a TomTom GPS Navigator unit with a friend so they could give it to his sister as a gift. They were having trouble figuring out how to split it, though, because Steve—who is a paying Amazon Prime member—was being offered the unit for $300, while his random stranger friend was seeing it for $50 less.

Regarding Amazon Prime, I have always touted and encouraged others to purchase Amazon Prime because I thought it was an incredible savings. Two-day shipping was ALWAYS two-day shipping with no delays. Of course, it boosted the amount of products I purchased on Amazon, but I always believed they offered the best prices. However, when shopping for my sister’s birthday present for a Tom Tom One XL Navi system for her car, I noticed something incredibly shocking. As an Amazon Prime member, I was being quoted a HIGHER price for the same exact item a person who was NOT a member of Amazon Prime was looking at. A friend who would have been splitting the cost of the gift saw the item as $250, whereas I only had the option of adding the product for $300. I was incredulous.

It’s clear to us, and we hope to Steve, that this is not a case of Amazon offering different pricing to members and non-members—instead, it’s a case of a third-party vendor simply offering a better deal. When you compare the two screenshots, you can see that the cheaper option is actually being offered by another company, which can discount its merchandise all it likes and make up the difference in other ways—for example, with shipping fees (although in this case, free shipping is offered with the cheaper deal). Steve should just forgo Amazon Prime and buy the cheaper item.

But this does raise a question—is Amazon Prime a valuable product to purchase? This is the strongest example we’ve seen yet of its limitations. Sure, you may save on shipping over the course of your membership (provided you order enough from them)—but you’re stuck with Amazon’s inventory and prices if you want to use Amazon Prime, even when there are vendors who can offer better deals.

The appeal behind Amazon Prime is that Amazon’s prices are good enough to make this whole scheme work. Then there are gotchas like the TomTom.

Update: Based on the comments below, it appears a lot of readers feel that I’m saying that Amazon Prime customers can’t see or take advantage of the better deals on the site. This is not the case. I’ve edited the headline slightly and added more text to make some assumptions very explicit, and to better focus on the issue of whether or not Amazon Prime is valuable. —Chris

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