Amazon May Have Made a Mistake in Killing a Popular Program

The online retail giant is facing blowback for its decision to end something customers loved.

Amazon, like many technology companies and a few retailers, has been cutting expenses as more-expensive money and cost-conscious consumers have hit the company's bottom line. 

That means the e-retail leader has had to make some tough choices and exit some areas that weren't paying off as quickly as the company had hoped.

As part of those efforts, Amazon (AMZN) - Get Free Report closed all its bookstores and its 4-Star stores while it cut back on some new store openings. The company has also scaled back its device aspirations and put a close-up lens on every area where it spends money.

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That's not a bad thing. Companies, Amazon included, should be examining their spending when times are good, not just when they take a negative turn. As part of its cutbacks, however, Amazon got rid of its popular AmazonSmile program.

AmazonSmile allowed customers to designate a charity and have a portion of their spending be donated to that charity as long as they shopped using a special URL. 

In closing the program, Amazon said:

"In 2013, we launched AmazonSmile to make it easier for customers to support their favorite charities. However, after almost a decade, the program has not grown to create the impact that we had originally hoped. 

"With so many eligible organizations -- more than 1 million globally -- our ability to have an impact was often spread too thin."

Many people who participated in the program and observed it disagree, or at least think Amazon should have changed it, not killed it, according to comments on a RetailWire story about the closure.

AmazonSmile Gets Mixed Reviews

A trade magazine of sorts, RetailWire asks for comments on its stories and often gets contributions from qualified industry sources and academics. In this case it asked the following questions:

• Was AmazonSmile too idealistically conceived, poorly executed, or given up on too early?
• What lessons does it offer about charitable donation programs tied to purchases?

That elicited responses from some qualified people.

"One would hope that this is not the end–but that they will re-conceptualize their effort. A program that supports one million charities strikes me as one with no focus. AmazonSmile was conceived as a great idea, but how to correctly execute it was never considered," wrote Gene Destroyer, visiting lecturer on international business at Guangzhou University of Finance and Economics and at the University of Sanya in Hainan Province, China.

Cambridge Retail Advisors Managing Partner Ken Morris agreed that AmazonSmile should exist, albeit with some changes.

"AmazonSmile made it easy for shoppers to feel good about buying from Amazon. Channeling almost $550 million into charities worldwide -- of each shopper’s choice -- is far from negative," he wrote.

Morris was not unsympathetic to the challenge of running such a diverse program.

"I also get the logistical challenge of over a million charitable organizations. I think, even for Amazon, this was overwhelming. It would be good if Amazon could focus its efforts on encouraging giving, but in a way that’s not so resource intensive. People will contribute to a worthy cause if given the opportunity, and every little bit counts. Maybe it’s not too late to retool the program," he added.

Multiple commenters on the RetailWire story also took an "every little bit helps" angle in defending the now-defunct program.

"The challenge for Amazon is transparency. Given their reputation for outsourcing to China, this program was a chance to bring visibility to charity efforts at home and was highly visible to the customer. While it’s true that by concentrating efforts on fewer charities a bigger impact can be made, the sad reality is that even small dollars are meaningful to so many charities, and it is these smaller charities that provide the biggest impact on the front lines of communities," wrote Hoobil8 Chief Strategy Officer DeAnn Campbell.

Amazon did give charities that had benefited from the donations a one-time donation equivalent to three months of what they earned in 2022 through the program.

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