Report claims Amazon's list prices mislead shoppers about discounts

Is Amazon ripping its customers off by tricking them into thinking they're getting a good deal?

The website features a "was" or list price with a line through it, then a current price along with how much you save. Consumer Watchdog believes the huge online retailer is deceptive in its pricing.

John Simpson with Consumer Watchdog says the group asked the California Attorney General to investigate Amazon's pricing.

"They are violating the California business professions act, but using reference prices," Simpson said.

Reference or "list" prices which he says, "really have no bearing on actual prices that are being charged."

Simpson used an ad for a camera as an example. The list price is $1,599. The actual price is $1,498. The ad displays the savings as $101.99.

At a news conference, Simpson said when you dig deeper and use a comparative shopping service, referencing to compare over 4,000 products, "...low and behold everyone's selling it for $1498."

"It's widely available in the market so, this 'list price' is a made up thing to make you feel you're getting a deal," he added.

Simpson says not only is that unfair. It's also illegal. When we contacted Amazon, they told us this:

"The Consumer Watchdog report is misleading. Manufacturers, vendors and sellers provide LIST prices, but our customers care about how the price they are paying compares to other retailers. We validate LIST prices against actual prices recently found across Amazon and other prices and we eliminate the LIST price when we believe it isn't relevant to our customers."

In response, Simpson said, "I don't think we're at all misleading. We have a six-page report along with methodology how we did what we did."

In that report, which found such things as Amazon continuing to include reference prices on more than a quarter of its stock, and on average -- Amazon's reference prices overstated the median market prices by $22 or 20 percent.

So, we looked for shoppers at Third Street Promenade in Santa Monica.

Sarah Holguin told us she loves shopping at Amazon. She didn't think the pricing was misleading.

"It's just saying a list price and their price. The bottom line is what the price is," Holguin said.

Shopper Travis Crawley told us he'd like to see the results of an investigation, and Craig Dade said he'd be doing more research when he shops, which is what Consumer Watchdog is recommending.

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