Online retail app and site news

Amazon Anywhere enables real-life purchases from video games

Bloomberg News — Wed, 10 May 2023 15:03:44 +0000

Amazon.com Inc. is bringing its online store to video games and mobile apps made by other companies through Amazon Anywhere. It’s the latest effort to extend the ecommerce giant’s reach beyond its sprawling online marketplace.

With Amazon Anywhere, introduced May 9, the company will let people on gaming, mobile, web and augmented-reality applications buy related real-world items without leaving the experience.

The service will debut with Peridot, an AR game featuring virtual pets from Niantic, the developer of Pokemon Go, the company said in a blog post. A video demonstrates a shopper linking their Amazon account to the game and purchasing a T-shirt, which is delivered from an Amazon warehouse.

The service allows consumers to buy physical products in gaming, mobile, web and augmented-reality applications.

The Seattle-based company has long tried to funnel users to its store, including via a longstanding program that offers a cut of each sale to partners that publish links to Amazon listings.

Now, facing increased competition from Shopify Inc. and other sellers of sophisticated ecommerce software, Amazon has sought to extend its reach to other corners of the internet. A program called Buy With Prime, launched in January, lets Prime subscribers use the speedy shipping service when shopping on other websites.

Retailers using Buy with Prime will receive shopper order information, including email addresses for customer orders. Merchants can use the data to provide customer service and build direct relationships with shoppers, Amazon said.

Amazon is No. 1 in the Top 1000. Digital Commerce 360’s Top 1000 database ranks North American web merchants by sales. Amazon is also No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.

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These are the big legal issues to keep an eye on in 2023, according to an ecommerce expert

Mary Meisenzahl — Mon, 01 May 2023 13:25:06 +0000

Ecommerce retailers have to stay on top of evolving legal requirements in areas where they operate. Lawyer Robert Freund, who focuses on ecommerce, told Digital Commerce 360 about some legal trends he’s keeping a close eye on.

Subscriptions and automatic renewals

Subscriptions have long been promising territory for ecommerce retailers hoping to build a returning customer base. The global subscription box market reached $26.9 billion in 2022, according to Expert Market Research. The firm expects the subscription box market to reach $74.2 billion by 2028.

However, the legality of automatic subscription renewals can be difficult to navigate, according to Freund. Subscriptions and cancellations are governed by many laws across the U.S. The 2010 Restore Online Shoppers’ Confidence Act (ROSCA) requires retailers to provide “simple mechanisms for a consumer to stop recurring charges.” In 2021, The Federal Trade Commission issued a statement warning companies about employing “illegal dark patterns” to keep customers from canceling memberships.

Because the federal law is somewhat vague, many states have adopted their own, stricter laws. The combination of federal laws, FTC enforcement, and differing state laws result in a “patchwork of laws across the country” that are sometimes inconsistent, Freund says. “If you want to comply with every law in every state, it’s very difficult if not technically impossible.”

Chatbots

Chatbots are ubiquitous in ecommerce for customer service and support. They’ve also been the subject of a wave of class action lawsuits in California over recent months, Freund says.

Since July 2019, retailers using chatbots in California must identify them to consumers under the Bot Disclosure Act. The law defines a bot as “an automated online account where all or substantially all of the actions or posts of that account are not the result of a person,” operating on “any public-facing Internet Web site, Web application, or digital application, including a social network or publication.” Failure to disclose use of a bot can result in a fine of $2,500 per violation.

One law firm is proposing a more novel case that chatbots violate California’s wiretapping laws, Freund says. Chatbots often record conversations, and according to that case it’s illegal unless a consumer gives consent. Courts haven’t ruled on the issue because it’s so new, Freund said, but it could have major implications for any brand using a chatbot.

Fake sales

Fake sale class action lawsuits are not new, Freund says, but they’re a perennial issue for retailers. They’re also known as deceptive pricing or false pricing. Retailers can be successfully sued when they misrepresent the value of an offer, such as by portraying it as a 50% discount when the product was never for sale at the original inflated price.

Plaintiffs have filed similar lawsuits for at least 10 years, and “brands continue to get this wrong,” he told Digital Commerce 360. Macy’s (No. 17 in the Top 1000), J.C. Penney (No. 41), Sears (No. 59), Kohl’s (No. 23), and other retailers have all faced these lawsuits. Once one is successful, other plaintiffs’ lawyers can see it as “blood in the water,” Freund says, and find further cases. The Top 1000 is Digital Commerce 360’s database of the largest North American online retailers.

Retailers continually find themselves in this situation because of an awareness problem, according to Freund. Some retailers feel they have “safety in numbers,” because their competitors are doing the same thing, he says. Others aren’t willing to sacrifice the potential conversion on the chance of being sued.

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Amazon will charge for some UPS returns, warn customers about frequently returned items

Mary Meisenzahl — Fri, 14 Apr 2023 19:44:38 +0000

Amazon recently rolled out new policies around returns. The ecommerce giant will now charge for some orders that are returned to UPS stores. It also added the label “frequently returned” to some listings.

Amazon ranks No. 1 in the Top 1000 list of ecommerce retailers in North America, and No. 3 in the Online Marketplaces database.

Amazon returns at UPS will no longer be free

Customers who drop returns off at UPS locations could be charged $1 per order going forward, The Information first reported. The fee will only apply if there is a Whole Foods, Kohl’s, or Amazon Fresh location closer to the order’s address than the UPS store.

“We offer convenient, easy returns to Amazon customers, with one or more options for label-free, box-free returns at no cost,” a spokesperson told USA Today. “We always offer a free option for customers to return their item. If a customer would prefer to return their item at a UPS Store when there is a free option closer to their delivery address, a very small amount of customers may incur a $1 fee.”

Amazon will list some products as “frequently returned”

The online retailer also added a badge to some items warning customers that they are “frequently returned.” The Information first noticed the label on a record player and two dresses.

“We’re currently showing return rate information on some product detail pages to help our customers make more informed purchase decisions,” a spokesperson told The Information.

Amazon did not return Digital Commerce 360’s request for comment.

Returns matter to customers, but they’re not the most important factor

A Digital Commerce 360 survey of over 1,000 consumers in August 2022 found shoppers regularly consider a potential return before they purchase. 54% take free returns into consideration, and 39% also look at the cost of a return. One-quarter of consumers said the timeframe is important.

It’s too soon to tell if Amazon customers will react negatively to the new policy, according to Michael Levin, co-founder and partner at research firm Consumer Intelligence Research Partners.

“We expect it’s not a huge deal, though, and a very small percentage of marginal customers would react negatively,” he said. “Consumers decide first on cost and convenience of buying something, and think later, if at all, about how easy (or not) it is to return that thing.”

Some customers have already taken to social media to complain about the change, Business Insider reported.

The new policy keeps Amazon on par with the competition, Levin said.

“Many, many retailers charge customers for return shipping, although as far as we know, the major ones (Walmart, Target, etc.) don’t do it aggressively,” he said.

These changes around returns are a more transparent way for Amazon to be upfront about costs with customers, Josh Lowitz, also of Consumer Intelligence Research Partners, said.

“This move is similar to Amazon offering a dollar or two for accepting slightly slower shipping, or combining deliveries into a single delivery day. Amazon is letting shoppers know that they will share the savings, if a customer allows Amazon to operate more efficiently,” he said, by keeping prices lower for less expensive types of returns. Lowitz also pointed to Amazon’s policy of offering returned items for sale at reduced prices.

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Tractor Supply 2022 conversion for BOPIS and curbside is 60% higher than home delivery

Gretchen Salois — Mon, 20 Mar 2023 14:17:01 +0000

“A large percentage of our ecommerce orders — over half — are picked up either in the store or curbside,” says Letitia Webster, senior vice president of ecommerce, omnichannel and master data at Tractor Supply Co.

Letitia Webster, senior vice president of ecommerce, omnichannel and master data, Tractor Supply Co.

With nearly 2,100 store locations, Tractor Supply’s customer is increasingly a hybrid shopper that shops in store and orders online, Webster says.

Tractor Supply shoppers opted for buy online, pick up in store (BOPIS) well before the pandemic, Webster says. During COVID-19, the retailer expanded this to include curbside pickup.

“[BOPIS and curbside] are the most popular fulfillment methods with our customers even today and continue to be a primary avenue,” Webster says.

Conversion in 2022 for BOPIS and curbside pickup was 60% greater compared with home delivery, Webster says.

This boost is due in part to the farm and ranch retailer’s mobile app, she says. The app has driven convenience to a new level, Webster says. Customers can place their orders within the app. It notifies the customer when their order is ready. Through the app, customers can alert the store they’re on their way. Store employees have in-ear devices from software vendor Theatro that alert them to have the items ready for in-store or curbside pickup.

Tractor Supply fulfills three-quarters of online orders in store

The retailer fulfills 75% of ecommerce transactions through a store.

“That’s significant based on our store base,” Webster says.

Tractor Supply’s online average order value is about three times the store’s, Webster says. Tractor Supply ranks No. 102 in the Top 1000, Digital Commerce 360’s database of the largest North American online retailers by web sales.

Mobile app downloads reach 4 million

More than 4 million shoppers have downloaded Tractor Supply’s mobile app since it launched nearly three years ago, Webster says.

1.9 million shoppers downloaded the app in 2022 alone. Webster says half of online sales come from mobile shoppers and half are desktop shoppers.

The retailer has a large rural customer base, Webster says.

“We’ve always had a big mobile balance,” she says. “Some of that has to do with previous limited access [to internet] in rural communities.”

After the pandemic, internet coverage reached into more markets the retailer serves.

Neighbor’s Club loyalty program boosts bottom line

The biggest driver behind the app downloads is the retailer’s Neighbor’s Club loyalty program, Webster says. Over the last two years, Neighbor’s Club membership has increased 47% to more than 28 million members, according to the company’s earnings call for its 2022 fiscal fourth quarter ended Dec. 31.

“I think it stands to reason that if you’re a retail business with an app, your loyalty shopper tends to be your biggest app user,” Webster says. “Because they’re your most loyal customer. They want simplicity.”

The app includes information about the loyalty program. This includes how the shopper is progressing through the different tiers of the program. Shoppers can see what rewards they’ve earned and they can redeem points and buy within the app.

Shoppers can also tap on a button within the app for other quick pickups like propane tank refills at propane refill locations, Webster says.

The app also serves as a way for customers to find associates while using the “in-store mode.”

“The app alerts team members through their devices that a customer is looking at something and needs assistance,” Webster says. This is particularly helpful for customers buying medications for animals, she says. There is a separate “My Pet” section located in the app that allows pet owners to complete reorders and connect with a vet. Webster declined to share what portion of mobile app sales are pet related, but she says pet food is a large percentage of pet-related sales.

Just under 20% of all ecommerce sales are attributed to the mobile app alone, Webster says.

Some categories are more popular within the mobile app than others, Webster says.

“Livestock feed and food, like chicken feed, something you run out of more quickly,” she says, “you can set that as a one-touch reorder option [in the app],” which encourages engagement with the app.

Neighbor’s Club accounts for 75% of total sales. The majority of Tractor Supply’s Neighbor’s Club sales are in store. Neighbor’s Club customers accounts for about 7% of online sales, in line with the retailer’s overall ecommerce sales, Webster says.

Prioritizing fulfillment centers over using stores to fulfill online orders

Tractor Supply has a network of fulfillment centers across the U.S.

“Every one of them has the ability to ship to a customer’s home,” Webster says.

Three are dedicated to online orders, she says. “But all [fulfillment centers] have the capability of fulfilling an ecommerce order,” Webster says.

What Tractor Supply is not doing is reallocating additional store space to process ecommerce orders, Webster says.

“We just learned to leverage stores differently,” she says.

For example, for nearly three years, 95 Tractor Supply stores have shipped small parcels to customers using store inventory, Webster says.

“And out of that 95, we have the ability to reach the country within a day,” she says. “That’s why we don’t [ship] out of every store. We have 95 stores that can strategically do this.”

Webster says 235 stores also offer team-member delivery services. Tractor Supply employees adorned in their red store vests deliver orders using store trucks and trailers.

“That’s whether the order originates in a store or originates online,” Webster says. “This has given us the ability to have a nice branded delivery program.”

Tractor Supply’s branded delivery is in addition to the other shipping methods the retail chain uses. This includes shipping companies XPO Inc., FedEx Corp., and Roadie.

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Walmart chips away at Amazon’s lead with wealthy online shoppers

Bloomberg News — Thu, 09 Mar 2023 20:59:22 +0000

Walmart Inc.’s online subscription service, Walmart+, is growing — and narrowing the gap with Amazon.com Inc. in a key demographic: affluent shoppers.

Walmart+ launched in 2020 as the grocery chain’s answer to Amazon Prime. Today, it resonates with higher-income households eager to fend off inflation. At $98 a year, Walmart+ costs $41 less than Prime and offers many of the same perks, including shipping discounts and video streaming. Walmart’s subscription service also has benefits Amazon can’t match, like discounted fuel at gas stations around the US.

Amazon is No. 1 and Walmart is No. 2 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by sales. Amazon ranks No. 3, and Walmart ranks No. 9 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Walmart+ is growing quickly

In February, 28% of U.S. households with annual income of at least $150,000 were members of Walmart+, up from 13% a year earlier, according to Prosper Insights & Analytics. Amazon Prime still has a commanding lead with 77% of those households, up 7 percentage points from the previous year.

Walmart’s inroads with this cohort mirror what’s been happening in its stores. The company is gradually shedding its reputation as a destination for lower- and middle-income shoppers. Attracting and hanging onto wealthier customers is now a key priority for the company, and executives see ecommerce as a big selling point.

Walmart+ benefits from the same “flywheel” effect Amazon experienced when it launched Prime in 2005. As Walmart attracts more shoppers, it lures more brands, which in turn bring in even more shoppers.

Walmart’s stores are an advantage

Besides borrowing Amazon’s online playbook, Walmart is capitalizing on a vast network of stores. 90% of Americans live within 10 miles of a Walmart location. Shoppers can pick up online orders from their closest Walmart. America’s largest grocer also has a decided advantage in fresh food, a market Amazon has been trying to crack for years. Walmart+ offers members free delivery on orders of at least $35. Amazon last month raised its free grocery delivery threshold to orders of at least $150.

“Walmart is eating into Amazon’s ecommerce market share and legitimately becoming a competitor,” said Alasdair McLean-Foreman, founder and CEO of Teikametrics, a Boston-based software firm that helps merchants buy advertising on Amazon, Walmart and other platforms. “People are seeing Walmart as a viable marketplace, and that wasn’t the case in 2019 or 2020.”

Amazon is the clear winner for now

To be clear, Amazon remains the undisputed king of online commerce in its home market. U.S. shoppers will spend $431 billion on Amazon this year, almost six times the $74 billion they’ll spend on Walmart, according to Insider Intelligence. Walmart is expected to have 6.3% of the U.S. online market this year, a fraction of Amazon’s estimated 37.6% share.

Still, Walmart is gradually gaining on Amazon. In 2020, the company surpassed EBay Inc. as the second-largest ecommerce player in the U.S. And there are signs that the Bentonville, Arkansas-based retailer will continue to gain momentum. Walmart+ members skew younger than Amazon Prime members, a promising trend for Walmart if it can hang on to them. About 65% of Walmart+ members are between 18 and 44 years old, compared with 51% for Amazon Prime, according to Prosper.

Walmart+ has plenty of room to grow. About 11 million U.S. shoppers are “very likely” to subscribe to the service, adding to the approximately 18.5 million existing members, according to a February survey conducted by Morgan Stanley. Meanwhile, Amazon Prime had 168 million members in the U.S. as of December, unchanged from a year earlier, according to Consumer Intelligence Research Partners.

Amazon spokesman Bradley Mattinger disputed that the subscription service has stopped growing.

“Prime membership continues to grow — in the U.S. and worldwide — as the value members receive continues to increase,” he said.

Online advertising is an opportunity for Walmart

Walmart’s online advertising business is a fraction the size of Amazon’s. But here, too, Walmart has an advantage because it can provide brands with data on how shoppers spend not just online but also in stores, said Sreenath Reddy, the founder and CEO of Intentwise, which helps clients place ads on web marketplaces. Walmart.com is also less crowded than Amazon.com, with about 135,000 merchants compared with some 2 million on Amazon. That makes it easier for brands to stand out on Walmart, he said.

“I think Walmart+ is about more than just handing savings to people,” Reddy said. “It’s connecting the online and offline world in a way that wasn’t possible before.”

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Bottoms up: A B2B distributor tops $3 billion in digital sales

Mark Brohan — Mon, 09 Jan 2023 19:41:14 +0000

One of the nation’s largest distributors of wine and spirits isn’t crying in its beer when it comes to B2B ecommerce.

In 2022, Miami-based Southern Glazer’s Wine & Spirits LLC racked up $3 billion in digital sales on SGProof.com, its B2B ecommerce platform.

John Wittig, chief commercial officer, Southern Glazer’s Wine & Spirits

“We will continue to invest in industry-leading functionality to equip our sales team and enhance the Proof platform as we aim to strengthen the bond between Southern Glazer’s, our customers and suppliers in 2023 and beyond,” says Southern Glazer chief commercial officer John Wittig.

The distributor does business in 44 states. In September 2020, it rolled out an array of new ecommerce features designed to let beverage retailers and distributors more easily and efficiently place and manage orders online.

The updates to proof let Southern Glazer’s clients search for products by broader criteria, including:

Brand
Grape variety
Price
Type of container
Value-added packaging
Other specifications, such as whether Southern classifies a product as organic or kosher.

The new features further give registered users the ability to view up to two years of past purchases and see open orders, invoices, credits and delivery schedules.

Since then, Southern Glazer has added or updated multiple features. One is a mobile feature with barcode scanning for easy ordering, a smart recommendation tool that helps customers with quick alternatives when items are out of stock. Another includes previously purchased and order history features that saves customers time for reordering frequently bought items.

Other new features Southern Glazer provides are:

An improved cart that makes it easier for customers to shop favorite items or save for later,
Enhanced search filters to help find diverse-owned brands, low proof items, specific supplier products and more,
And a feature to conveniently request delivery date changes.

In 2022, more than 82,000 hospitality customers placed orders on SGProof.com, purchasing more than 61,000 products and resulting in more than 17 million cases delivered. In addition, sales consultants generated more than 1 million proposals through the platform, leading to millions of dollars in incremental sales and 70,000 new points of distribution, the distributor says.

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Loop processes 60,000 returns a day during 2022 holiday season

Abbas Haleem — Mon, 09 Jan 2023 19:10:52 +0000

Shoppers bought a lot online in the 2022 holiday season — a record-breaking $35.27 billion, according to Adobe Analytics data. But they also returned a record-breaking amount, according to data from Loop Returns.

Web sales during the Cyber 5 period from Thanksgiving through Black Friday led to a 31% year-over-year increase in returns, according to Loop. Loop is a Shopify-integrated return-management software company. Its returns data comes exclusively from its more than 1,800 merchants using the Shopify platform.

Loop processed a return every 1.25 seconds, on average, on Dec. 27, 2022, which the company said was its busiest day ever. Returns peaked at about 2 per second, on average, during its busiest hour that day.

“We anticipated a spike in returns,” said Loop co-founder and CEO Jonathan Poma. “But we were blown away by these numbers. This is a lot of returns to handle for independent businesses of any size.”

Loop says it processed about 300,000 returns from Dec. 26, 2022, to Dec. 30. That’s an average of 60,000 returns a day.

Its three busiest days for returns in 2022:

Dec. 26: 65,000 processed returns
Dec. 27: 68,000 processed returns
Dec. 28: 62,000 processed returns

The return process is an opportunity to upsell

Returns outpaced sales, according to Loop. But that’s not necessarily a bad thing for the company.

In addition to processing returns for refunds, Loop also allows Shopify merchants to exchange products or upsell. It allows shoppers to apply the value of their current return order toward other products they want. It displays items that a shopper could apply their return order’s value to. Loop also suggests to shoppers that they exchange their product for a new size or color, or for another item entirely. It displays out-of-stock messages directly from that exchange suggestion screen.

Loop said this helped its merchants upsell 38% more year over year in 2022.

“We’re thrilled to have played even a small role in the successful holiday season of our merchants,” Poma said. “Especially at a time where gifts are bought for others, sizes and preferences are going to be wrong.”

Overall ecommerce return rate

Online return rates dropped to 16.5% in 2022 from 20.8% in 2021, according to a study from the National Retail Federation and Appriss Retail.

For the first time since online data has been captured as part of the survey in 2019, online return rates are consistent with the overall return rate, the report said. Furthermore, retailers lose $10.40 to return fraud for every $100 in returned merchandise accepted.

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Salesforce to cut 10% of staff, highlighting slowdown in tech spending

Bloomberg News — Wed, 04 Jan 2023 16:59:04 +0000

Salesforce Inc. announced it will cut about 10% of its workforce and reduce real estate holdings. The enterprise software company said it hired too many people during the pandemic-fueled boom and is adjusting to more cautious customer spending.

The workforce moves should be completed by the end of fiscal 2024, Salesforce said Jan. 4 in a regulatory filing. They cost the company $1.4 billion to $2.1 billion. As much as $1 billion of that will come in its fiscal fourth quarter. Salesforce had about 80,000 employees.

“The environment remains challenging, and our customers are taking a more measured approach to their purchasing decisions,” Salesforce CEO Marc Benioff said in a Jan. 4 letter to employees. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”

Benioff said in the letter that many of the affected employees would be notified within the “next hour” and will receive a minimum of about five months of pay, health insurance, career resources, and other benefits. Those outside the US will receive a similar support aligned with local employment laws, the letter said.

Salesforce growth leading up to and during the pandemic

The software giant is the largest private-sector employer in its hometown of San Francisco. It has almost tripled its workforce in the past four years. That growth came in large part through dozens of acquisitions, including buying Slack in 2021 for $27.7 billion. From January 2020 to the end of October, headcount grew by more than 30,000.

Many tech companies are suffering in the wake of the COVID-19 growth spurt, which saw a surge in demand for electronics and cloud applications like collaboration software as work and schooling shifted to homes. But the pace of that growth has been impossible to maintain. Across the industry, sales of smartphones and PCs are slowing worldwide. Salesforce and peers like Zoom Video Communications Inc. have seen customers scrutinizing software spending at a time of high inflation and economic uncertainty.Salesforce’s pullback likely reflects an industrywide slowdown in enterprise IT spending, rather than the company losing market share to rivals, wrote Bloomberg Intelligence analyst Anurag Rana.“Salesforce benefited from increased demand during the pandemic and hired aggressively as a result. These cuts could help management meet its adjusted operating margin goals” of about 175 basis points of improvement annually for at least the next three years, Rana wrote.

Pressures on Salesforce and the tech industry

The software giant is under pressure from investors including activist Starboard Value to improve profit margins. Meanwhile, it has projected the slowest revenue growth for the current quarter since going public in 2004. It has also seen top executives including Co-CEO Bret Taylor and Slack CEO Stewart Butterfield announce their departures.

Investors expected job cuts, but 10% is probably more than anticipated, wrote Keith Bachman, an analyst at BMO Capital Markets.

Salesforce also said it would reduce office space, which would cost from $450 million to $650 million. The real estate restructuring is expected to be completed in fiscal year 2026. Salesforce has more than 60 offices globally, according to its website.|

“Over the past two years, we have continued to re-imagine our real estate strategy,” Chief Financial Officer Amy Weaver said during a conference call in November. “When leases come up and we don’t renew, when we consolidate areas, it’s something that we are continuing to benefit from.”

Job cuts have roiled the sector in recent months. Meta Platforms Inc., Amazon.com Inc., Twitter Inc., HP Inc. and Seagate Technology Holdings Plc. also announced thousands of reductions.

Salesforce’s difficulties reflect growing economic anxiety among its corporate customers. During a November earnings call, executives said clients in the tech and finance sectors weren’t increasing their spending while industries like manufacturing and travel saw continued demand for the company’s customer management software. Other software makers, such as ServiceNow Inc. and Workday Inc., have touted strength from the hospitality and retail industries while also experiencing a slowdown in total revenue growth.

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IRS delays $600 tax reporting rule for Venmo, Etsy sellers

Bloomberg News — Sat, 24 Dec 2022 19:40:06 +0000

The Internal Revenue Service is delaying a requirement for ecommerce platforms to send tax forms to customers who have transactions of more than $600. Those platforms include Venmo, PayPal, Cash App and Etsy.

The one-year delay is a reprieve for individuals who use those digital payment platforms to conduct business. Congress reduced the tax reporting threshold to $600 from $20,000 in 2021. It would have affected people filing tax returns in the spring of next year.

The IRS said it will use the coming year to transition to the new requirement and that more information would be available soon.

“The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements,” acting IRS commissioner Douglas O’Donnell said in a Dec. 23 statement.

Representatives of PayPal Holdings Inc. and Block Inc. didn’t immediately respond to requests for comment. PayPal owns Venmo, and Block owns Cash App.

IRS transitions to new requirement

The 2021 pandemic aid legislation known as the American Rescue Plan Act included the requirement for third-party payment processors to send 1099-K forms to taxpayers with more than $600 in business transactions, with no minimum number of transactions required. Previously, the law had the higher dollar threshold as well as a minimum of more than 200 transactions.

The IRS said the law isn’t intended to track personal transactions, such as reimbursing a friend or family member for a meal or gift, or for paying a household member for a bill. However, the difficulty of delineating personal and business transactions has caused critics of the proposal to say that it could result in people receiving IRS forms for payments on which they don’t owe taxes.

Online marketplaces such as eBay Inc. also pushed for the IRS to increase the $600 threshold. They argue that the lower threshold will cause confusion for taxpayers who sold used goods online for less than the original purchase price.

The delay comes after pleas from Congress. Lawmakers expressed interest in raising or delaying the $600 threshold, but they were unable to include that change in the year’s spending bill.

“I am pleased the Treasury Department and the IRS listened to my request to delay the 1099-K reporting requirement that will harm small businesses and individuals who sell goods online across America,” Senator Joe Manchin, a West Virginia Democrat who pressed for a delay, said in a statement. “This will allow Congress more time to correct this regulation that puts undue burden on our small businesses.”

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Amazon outage frustrates sellers and shoppers

Gretchen Salois — Wed, 07 Dec 2022 17:56:15 +0000

For about one hour on Wednesday morning, thousands of Amazon.com Inc. shoppers received error messages during checkout.

Amazon’s message for shoppers using its app or website said the merchant was experiencing “unusually heavy traffic.”

Some Amazon sellers said they noticed an impact during the outage.

“Sales just nosedived” for part of the morning, said Ethan Goldstein, CEO of Curist, an Amazon marketplace merchant and seller of online medicine.

Curist Relief comparison of daily units ordered by hour. The red line represents units ordered on Amazon.com on Dec. 6. The blue line indicates sales for Dec. 7 during the outage.

Goldstein said on Dec. 7, from 9 a.m. ET, the number of orders decreased 95% compared with yesterday. Through 10 a.m. ET, the number of orders decreased 34% compared with the same period on Dec. 6.

“That includes some of the early morning where everything was fine,” he said.

According to Down Detector, which tracks internet outages, problems peaked at about 9:07 a.m. ET, affecting customers throughout the U.S. and worldwide. Shoppers received error messages and could not complete checkout.

Beyond Amazon’s reference to heavy traffic, the reason for the outage is unclear. When reached for comment, Amazon spokesperson Betsy Harden said at 10:20 a.m. ET, “We’re sorry that some customers may be experiencing issues while shopping. We appreciate your patience as we work to resolve the issue.”

By 11:44 a.m. ET, Amazon shared, “We have resolved the issue, and everything is now running smoothly.”

Amazon.com’s outage comes two days after Amazon Web Services (AWS) experienced an outage on Dec. 5.

Reasons for Amazon outage unknown

Sellers experienced difficult accessing the site early Dec. 7, said Fahim Naim, head of Amazon at Advantage Unified Commerce, an ecommerce consulting agency. But, the actual impact remains to be seen.

“What we can’t tell is if the drop in hourly sales per the reporting is real and due to customers not being able to access the site, or if it’s another data issue,” Naim said. “Across accounts, we see a huge dip in reported sales by hour between 7 a.m.-10 a.m. ET, but I am not clear if that is a reporting issue due to AWS also having issues this morning — or if that is real.”

Shoppers took to Twitter to voice their frustration. One Twitter user posted, “It would be nice if Amazon would admit there’s a problem. Going on half an hour now.”

Web performance vendor Blue Triangle said while it didn’t see the Amazon outage, it did notice issues around the same time as the Amazon outage for other clients the company monitors.

Blue Triangle bases its website performance ranking on metrics such as Largest Contentful Paint (LCP), which measures the time a website takes to show a user the largest content on the screen, complete and ready for interaction.

Amazon is No. 1 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by web sales. It is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

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