DACO suing Amazon for discriminating against P.R. consumers

Written by  //  October 26, 2011  //  Retail  //  15 Comments

Amazon founder Jeff Bezos. (Credit: Wikipedia)

After failed attempts to convince online retailer Amazon to reinstate its free shipping option to Puerto Rico, the Consumer Affairs Department is preparing to file a lawsuit against the Seattle, WA-based company for discriminatory practices, News is my Business confirmed Tuesday.

The suit to be filed in coming weeks will claim Amazon is incurring in discriminatory practices against Puerto Rico by discontinuing the “Free Super Saver” shipping option, said José Miguel Talavera, director of the Anti-Discrimination Commercial Office of the consumer watchdog agency known as Daco.

“We sent a letter to Jeff Bezos, founder of Amazon, who handed it to one of his assistants who told us it was an error in programming and that it should not have been offered in Puerto Rico,” Talavera said. “This is clear discrimination, as they said for now, they will not be making any changes.”

The free shipping option on purchases of $25 or more had been available to Puerto Rico consumers for a decade, but was dropped in August when Amazon officials said it had only been available due to a “glitch in its computer system.”

Amazon’s policy has been to exclude U.S. territories, including Guam, the U.S. Virgin Islands, American Samoa, and the Marianas, from its money-saving benefit. Ironically, however, it extends free shipping to Hawaii, which although a state, is geographically farther away than Puerto Rico is from the U.S. mainland.

While Talavera would not disclose what the course of action would be to avoid revealing Daco’s strategy, he said the federal lawsuit will seek equal treatment for Puerto Rico. It could also open the door for a class-action suit by Amazon customers who have had to pay shipping fees after the option was dropped.

“There’s no reason to treat Puerto Rico differently. After 10 years of the system working fine, they chose to discontinue the offer,” Talavera said.

Amazon reported a drop in third-quarter profit Tuesday, with net income falling 73 percent to $63 million from the $231 million, on record for the same year-ago quarter. The company attributed the decrease to increased spending on new products such as the Kindle Fire tablet.

Anti-discrimination unit pursuing other retailers
Since being created by an administrative order in September, the Anti-Discrimination Commercial Office has contacted 250 stateside retailers and companies that refuse to ship to the island or include Puerto Rico in other activities, such as sweepstakes, Talavera said.

“We’ve contacted companies with and without local presence, asking them to justify the reasons why they don’t give local consumers equal treatment, to evaluate it,” Talavera said. “If they aren’t real reasons based on issues like excise tax costs, or federal or local regulations, we will move forward with imposing fines for violating the administrative order that created the division.”

He said the feedback from companies thus far has been positive, “and they say they’re looking for ways to comply with the order.”

“It is surprising to see the number of companies that operate in the U.S. mainland, from which local consumers buy, that do not ship and fail to treat us the same as they do Alaska and Hawaii,” he said. “They classify us as an international destination or sometimes fail to include us at all.”

Over the past seven weeks, the Anti-Discrimination Commercial Office has been orienting companies on Puerto Rico, “telling them we use the dollar, the same shipping services as the rest of the nation and that it represents a business opportunity for them to expand their operations,” Talavera said.

  • ash

    The same thing its happening woth forever 21. Free shipping for $50 or more and then if you live in PR you have to pay a exesive amount of money.

    • Lo

      Ash: Gap, Macy’s, Old Navy, Banana Republic, Neiman Marcus, Victoria’s Secret, and many others honor free shipping to Puerto Rico…

  • ricky

    Yes very good it os unfair when we have the same postal service providers as in U.S why Hawaii why not Puerto Rico same with Ebay they have an option to exclude procatories territory thanks good work DACO

  • CH

    Lets see. If DACO is successfull…maybe they can 1st go after other online sellers for the same practices…& then after companies like BestBuy & Sears who charge PR people more money then they do in US. That was acceptable in the past because of the excise duty…but after IVU…& no excise duty..these retailers have been looting the PR public.

  • Lo

    I was a faithful amazon client for years and years – used to buy everything from books, to music, shoes, video games…you name it, even natural household and personal care products. The second they dropped the free shipping option recently, I dropped Amazon. What was most insulting, is that I didn’t find out about the change in policy until I placed an order and could not get the free shipping to apply to the purchase summary. Did they send out a message to Puerto Rico clients as a courtesy? I don’t think so, but maybe I missed it. Frankly, there are plenty of stores online that honor free shipping to Puerto Rico; for books, music, textbooks and video games, Barnes & Noble; for shoes, Endless.com; for household and personal care products, drugstore.com and beauty.com – and like these there are tons. I no longer need Amazon.

  • Harkadenn

    This made my day. Good work DACO and I agree with above posters. The discrimination is really out of hand. Oh and I simply stopped going to best buy and all my friends because it’s true what CH wrote.

    Finally a change is ablut to come!

  • Joel Roman

    I have been buying from Amazon for over a decade now, bought mostly school books for college and my Masters> It’s a shame they do that now and am glad DACO is working hard for us. I hope they go after the individual sellers on Ebay who refuse to ship to Puerto Rico, some say we’re International when it is a blatant lie. Others say the shipping cost is more when they could just use the Flat Rate Box method.

    Once again…. thank you DACO!!!!!

  • http://www.hectorramos.com Héctor Ramos

    Go ahead and open up talks with Amazon, but don’t overstep it. We could end up not even being able to receive shipments from Amazon, at any price. Rushing out of the gate with legal threats is not in the Puerto Rican customer’s best interest, DACO.

  • http://www.popartmiami.com/romero-britto Britto

    Yes very good it os unfair when we have the same postal service providers as in U.S why Hawaii why not Puerto Rico same with Ebay they have an option to exclude procatories territory…..

  • Anonymous

    I understand amazon issue. The issue is they fail to identify in the order process whos going to send the item. Either USPS or UPS. If they send the item by usps then they could offer free shipping but if they ship by UPS then it gets ugly. I wish they offer free shipping for specific cetegory like books and games. But even games are being sent by UPS (collectors editin) So if you want to strike back amazon just buy big items with default shipping and let them pay the shipping difference

  • Daurys

    I am speechless. Last year I got an Electric Bass kit, with its amplifier, bag and everything, shipped free to Old San Juan from Amazon. It was a huge box that needed to be carried by two and they shipped it UPS Blue. The list of items Amazon had shipped free to me goes on: Shower Curtain holders, car carpet full sets, computer bags, many books, computer parts.. I mean, in the past 5 years I have managed to get free shipped stuff and quickly.

    That cheap excuse of a computer bug is a lie. A company that has always been a virtual mall and which has so much money, don’t just let a “glitch” slip for 10 years.

    They would still, however, get our money for Prime membership… but no free shipping. Ain’t that the whole point of Prime?

  • Melani Cruz

    I love shopping at amazon.com but the shipping is ridiculous and ……Hello we are not even that far away.

  • Oziel Hernandez

    Its about time… im trying to buy an inflatable kayak through ebay, that said that shipping was free.  When i put my PR adress, shipping is 120 dollars!!!! and some sellers dont even want to ship to PR because we are an “international adress”…  We are supposed to be like a state!! with shipping and everything the same as the continental states!!!!

  • JamieSalcedo

    It makes no sense to change policies. If anything, this might hurt their sales in the island and people will find other ways to ship things.

  • whatever you like

    Not all items in amazon.com are offered free shipping by buying $25 or more. It’s been always like that. Some items don’t ship to PR.

    I don’t know what’s the problem.

    If what I want to buy is not shipped to PR or if I have to pay a lot for shipping I look the item on eBay.com. It’s Amazon.com lose!!! They lose one sell.

    I bought a cellphone recently by amazon… I got no problem. Total was $84 and got a discount by amazon’s credit card rewards of $40!!! Final total $36!

    Guess the PR government should change another laws. Because everything that’s shipped here cost more than in the states. The food is very expensive. How in earth you think I am gonna pay $6.95 at Walmart for a box of strawberries if I have bought the same box at $2.50 in Florida? The problem might not be amazon but PR legislations about products entering into the island.

    (2013)