Amazon to pay $61M for pocketing tips promised to drivers
Amazon told delivery drivers in its Amazon Flex program – and customers who placed orders through Prime Now and AmazonFresh – that 100% of tips would go directly to the drivers. But, for more than two years, Amazon secretly pocketed over $61 million of those tips. Now the Federal Trade Commission will hold Amazon to its promises and Amazon will be returning the entire $61.7 million to Amazon Flex drivers.
What can you learn from this case?
When advertising, be transparent about material terms. Explain up front important information about pay, tips etc. If you change the nature of the deal, be clear about that, too. Concealing what’s going on can lead to class actions, fines, and investigations.
Substantiate your claims – express or implied.
Amazon misled customers and drivers by stating that “100% of tips are passed on to your courier.” How would customers have responded if Amazon had told them the truth: “We take 30% to cover our costs and pass on 70% to your courier”? Like other objective claims about products or price, companies also honor their representations to the public.
Do you engage in marketing or have an online checkout flow for your products or services? → You may want to hire a marketing lawyer to keep you out of hot water.