Amazon has introduced a new perk in which Prime members can earn two percent back on their purchases (so long as they’re willing to jump through a couple of hoops). Here’s how it works.
Let’s say you want to purchase something for $100. Instead of using your credit card to fund the purchase, the Amazon Prime Reload program will have you load funds from your debit card (which of course requires a checking account) onto your gift card balance. You’ll then use that gift card balance to make your $100 purchase and earn a $2 credit on your gift card balance as a reward.
Amazon’s motivation here is multifold.
By using your debit card, Amazon is avoiding costly fees associated with processing a credit card payment. In addition to saving some money on its end, Amazon is willing to pass along a portion of the savings directly to Prime users in exchange for inconveniencing them. What’s more, Amazon knows that if you’ve got money lingering in your gift card balance, you’ll probably be more inclined to spend it on something you might otherwise think twice about buying.
From the standpoint of the consumer, Prime Reload seems like a decent way to get a small kickback – especially if you’re the type that’s averse to using credit cards / amassing debt.
While it’s possible that you could earn more cash back with a credit card, you also have to remember that you won’t ever be charged interest on purchases made through Prime Reload as the funds are coming directly out of your bank account at the very moment you fund the gift card balance. For some, this mechanism could lead to less impulse spending.
Two percent isn’t a whole lot of money but over time, it’ll add up.