Amazon wants you to be a spy

Amazon.com has a new app that could save you money and hurt small businesses.

Amazon has a free smartphone app called Price Check and they're offering an interesting deal with it starting Saturday. You go into a store -- an actual physical bricks-and-mortar store -- find an item, scan it and the app will show you the price on Amazon.com. THEN, Amazon will knock an additional five percent off that price if you buy it using the app. That's five percent discount is capped at five dollars and only works on "up to three qualifying products in eligible categories, including electronics, tyos, music, sporting goods and DVDs." So the idea, from Amazon's perspective, is to have you go into a store somewhere else, but buy from Amazon.

Not only that, the app contains a feature where you can report the price that you found and the store you found it in. "Well, I just think it's not fair (for Amazon) to ask the consumers to do their market research," says retail analyst Faith Hope Consolo. "Because that's exactly what they're doing. They're sending the consumer in the store and they're asking them to be -- what should I say -- shopping spies."

The retail industry has always been competitive but the stakes are even higher this year. You might have noticed all the big Black Friday sales, many of which started some time on Thanksgiving night. At the same time, Internet retailers are luring people to buy online, leading to record online sales.

The Amazon app is just one more bit of ammunition in what is a rapidly escalating retail war. Consolo says some stores are better equipped to fight it than others. "The threat is more to the independents than maybe to the big boxes," she says, "because they can't price adjust, they don't buy enough bulk, they don't have enough inventory. If they adjust the price, they really hurt their profit margin. "

Waterloo Records & Video is located in Austin, Texas. Owner John Kunz says he's always relied on good service, helpful staff and a sense of community to battle back competition from Amazon and iTunes. But has he seen people using this Amazon app in his store? "Yes, I have," he says. "And even before they had the app, there were people that were putting in the information to check prices at other places. That's something the savvy shopper has done from the very beginning as far as I'm concerned. But it's just easier with mobile technology being what it is these days."

The fight for your dollars may be more intense this year because there are more dollars at stake. Sales are expected to be up 3 to 4 percent over last year. Consolo says retailers want to win at any cost. "I don't know if there's any normal playing field anymore. I just think the retailer closes their eyes and says I have to do whatever I have to do to be in the black by end of the year."

Also in this program, a new bill has just passed the House that would make it a lot easier to share your Netflix history with friends. The 1988 Video Privacy Protection Act specifies that consumers must give written permission - on paper - before a company can share a history of what the consumer watched. It's a holdover from the Supreme Court confirmation hearings of Robert Bork. Now that law is on its way to being adapted to the current day so you can agree electronically. And then FINALLY the world can know how much you like "Phineas & Ferb." Thanks, Congress!

About the author

John Moe is the host of Marketplace Tech Report, where he provides an insightful overview of the latest tech news.

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